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“Sugar tax” to be introduced with effect from 1 April 2018

Monday, 12 February 2018   (0 Comments)
Posted by: Author: Jerome Brink
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Author: Jerome Brink (CDH)

SARS recently confirmed by way of an announcement that it will begin collecting a new Health Promotion Levy, also known as the Sugary Beverages Levy (SBL) or “sugar tax”, with effect from 1 April 2018. The SBL is designed to support the Department of Health’s deliverables to decrease diabetes, obesity and other related diseases in South Africa.

The SBL was initially announced by National Treasury and the Minister of Finance in the February 2016 National Budget speech. After an extensive public consultative process with all relevant stakeholders, the SBL was formally legislated and forms part of the Rates and Monetary Amounts and Revenue Laws Amendment Act, No 14 of 2017 as passed in Parliament on 5 December 2017.

The rate pursuant to the SBL is fixed at 2.1 cents per gram of the sugar content that exceeds 4 grams per 100ml. The first 4 grams per 100ml are therefore levy free. In practice, SARS states that it will be paid in addition to any other customs and excise duty payable and imports will not be declared on separate bills of entry.

Importantly, sugar content means both the intrinsic and added sugar and other sweetening matter. Sugar content will be calculated on the sugar content as certified on a recognised test report from a testing facility accredited with the South African National Accreditation System (SANAS) or the International Laboratory Accreditation Cooperation.

In the absence of such a valid test report, a deemed sugar content of 20 grams per 100 ml will be assumed. For powder and liquid concentrates, sugar content will be calculated on the total volume of the prepared beverage.

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