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SUGAR TAX PROPOSED FOR SOUTH AFRICAN BEVERAGES – by Hans du Preez, Magalies CEO

 

South African Treasury is proposing a sugar tax on the beverage industry, and have issued a policy document in respect on 8 July 2016 requesting comment from the industry and public by 22 August 2016.

SUGAT TAX PROPOSED 2016

The Government’s objective is to reduce sugar consumption, which is linked to high instances of conditions such as obesity and diabetes (Link: http://mg.co.za/article/2016-02-24-budget-speech-2016-gordhan-introduces-sugar-tax ). But this proposal is opposed by the industry, who argues that this could lead to the loss of more than 60,000 SA jobs and consequently a huge negative impact on the struggling SA economy (Link: http://www.fin24.com/Economy/sugar-tax-to-cost-sa-60-000-jobs-warns-coca-cola-20160816 ). It is also argued that there is no substantial evidence that the implementation of this legislation in other countries has in fact been successful in reducing sugar consumption.

SAFJA invited members to participate in a forum to debate and formulate a submission to Treasury.

Magalies participated and gave its input to this controversial matter.

The forum met on 27 July 2016 and provided valuable input at the meeting and thereafter continues to do so. In addition SAFJA met with Treasury on 4 August 2016 in order to gain further insights and discuss issues.

A comprehensive submission with Treasury was lodged on 22 August 2016 and the concluding requests were:

  • Exemption of all 100% fruit juices (as per DAFF* definition)

  • Exemption of all fruit juice nectars (as per DAFF* definition)

  • Taxation based on added cane sugar

  • Consideration for exception of the entire fruit juice sector (as per DAFF*)

The CSD (Central Supplier Database) industry also made submissions and requested Government to drop Sugar Tax on all single strength beverages.

Treasury will consider submission and then arrange a workshop to give feedback and allow further debate.