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SA Sugar Tax Proposal - Not Such a Sweet Deal

Tuesday, 02 August 2016   (0 Comments)
Posted by: Author: Keelen Snyders
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Author: Keelen Snyders (BDO South Africa)

The Finance Minister announced a sugar tax on Sugar-sweetened Beverages (SSBs) with effect from 1 April 2017. On 8 July 2016 Treasury published a document for comment on a sugar tax on SSBs of R0.0229 (2.29 cents) per gram of sugar, or approximately R2.29 per litre of coke. The document demonstrates that the implementation is the most cost-effective way of reducing obesity levels in South Africa. 

The sugar tax proposal is in line with the Department of Health’s Prevention and Control of Non- Communicable Diseases (NCDs) 2013-2017 and Treasury’s Strategy for the Prevention and Control of obesity 2015-2020, which set a target of reducing obesity by 10% by 2020. The sugar tax is one of many planned interventions to reduce obesity. The creation of enabling environments that support the accessibility to healthy food, increasing physical activity and supporting obesity prevention in early childhood are among the interventions that have been proposed. 

The SSBs will include beverages that contain added sweeteners such as sucrose, high-fructose corn syrup, fruit-juice concentrates, and will include soft drinks, fruit drinks, sports and energy drinks, vitamin water drinks, sweetened ice tea and lemonade. Fortunately, beverages that only contain natural sugars in will not attract tax, for example 100 per cent fruit juices. It is also proposed that a relatively higher fixed gram of sugar be assumed for producers that do not apply nutritional labelling, to incentivise them to use labelling. 

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