Sugary drinks tax nets nearly R800-million

The tax on sugary drinks tax has already generated nearly R800-million because it was launched on 1 April, in response to Treasury.

Mpho Legote, Treasury’s director for VAT, excise duties and sub-national taxes, stated R779-million had been collected by the top of July, with an additional R14-million from import taxes.

The tax, referred to in legislation because the Well being Promotion Levy, quantities to a levy of two,1 cents per gram of sugar though the primary 4g of sugar per 100ml is exempt. It represents an 11 p.c improve on a can of Coca Cola.

The intention of the tax is to get folks to restrict their consumption of liquid sugar – a serious reason for weight problems, which brings with it quite a few well being risks, primarily diabetes, hypertension, strokes, coronary heart assaults and most cancers.

Treasury has additionally promised to allocate a portion of the earnings to the well being division to “promote well being”.

Excessive consumption of sugary drinks

In 2015, the mix of early retirement as a consequence of unwell well being, absenteeism and presenteeism (working whereas unwell) price South Africa’s financial system 6.eight p.c of GDP, in response to a examine by the US Chamber of Commerce.

Sibongile Nkosi, Govt Director of the Wholesome Residing Alliance (HEALA), warned that “South Africa has a severe and rising weight problems drawback, and our youngsters are amongst the very best shoppers of sugary drinks on the planet”.

“We might have favored authorities to have imposed a 20 p.c tax on sugary drinks to make an actual impression on consumption,” stated Nkosi. “We additionally wish to see the well being division utilizing the income from the levy to teach folks about learn how to keep wholesome.”

Well being economist Nick Stacey from the Wits College analysis think-tank Priceless warned that, whereas South Africa is going through financial challenges, “We have to suppose extra broadly about our public coverage, and in evaluating its impacts we have to place larger weight on lived measures of wellbeing corresponding to well being.”

Sugary drinks tax and the financial system

Not too long ago, Cosatu spokesperson Sizwe Pamla, claimed that the sugary drinks tax was partly liable for the present recession.

However Matthew Parks, parliamentary deputy co-ordinator for Cosatu, stated “it will be comical for us responsible the sugar tax for the recession”.

He stated that the sugary drinks tax is a “smaller factor” that “impacts rather less” as a result of “business has adjusted to accommodate it by decreasing the sugar content material [of drinks], and retailers are absorbing a whole lot of the associated fee themselves”.

“We’re simply saying the financial system is stagnant and in disaster, but the federal government continues tax will increase, significantly for the poor. That is exacerbating an already-precarious scenario,” Parks stated.

In the meantime, there’s a rising name for will increase in “sin taxes” – on alcohol, tobacco and sugary drinks – and the introduction of upper company taxes to reverse the one p.c VAT improve. A particular government-appointed committee has really useful that extra merchandise must be zero-rated, or exempted from VAT.

“Whereas it’s unsure in the mean time which merchandise might be zero-rated, will increase within the Well being Promotion Levy and alcohol and tobacco taxes may play a job in filling the fiscal gap left behind by the income misplaced on newly zero-rated merchandise, or on a discount in VAT ought to that in the end happen,” stated Stacey.

However Legote poured chilly water on the suggestion: “Will increase in sin taxes within the 2018/19 finances are anticipated to lift about R1.three billion, which pales compared to the income elevating potential of a share level within the VAT price – R23 billion,” Legote stated. – Well being-e Information

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