Guiding consumers since 2009

Sugar tax may exceed proposed 20%

By Jessica Anne Wood

National Treasury is proposing a 20% sugar tax on sugar sweetened beverages to be implemented on 1 April 2017. The aim of the sugar tax is to reduce the excessive consumption of sugar. The draft legislation has been published for public comment, which is open until 22 August, when all submissions must be in. However, there are concerns that the tax may exceed the proposed 20% when inflation is factored in.

While a rate of 20% has been proposed, Treasury noted that this will need to be adjusted in the future to keep up with inflation. “Specific rates (e.g. cents per gram) are often much easier to administer but require regular updates / increases in the rate, to at least keep up with inflation.”

The proposed tax rate

Treasury highlighted that literature suggests that a tax of 20% of the price of sugar-sweetened beverages (SSBs) would have a significant impact on the purchase and consumption of these drinks. This in turn would have an impact on obesity and the health of the country’s population.

“It is therefore proposed that a tax rate of R0.0229 (2.29 cents) per gram of sugar be implemented based on the current product labelling framework. This rate roughly equates to a 20 per cent tax incidence for the most popular soft drink (i.e. Coca Cola, averaging 35 g / 330 ml). For SSBs that currently do not apply nutritional labelling, it is proposed that a relatively higher fixed gram of sugar be assumed (i.e. 50 grams per 330ml) as an incentive for producers to move towards nutritional labelling until mandatory labelling legislative framework is put in place,” explained Treasury.

 

Recent Articles

Featured The bank took money from my account – is this allowed?

You’ve just deposited money into your account and suddenly you see a notification from your bank. Money has been deducted from your account to pay the outstanding debt that you have with the bank. Is this allowed?

How much does it cost to draft a will?

Having a Will allows you to determine who inherits your property when you die. If you die intestate, the government will determine how to distribute your assets. Many people die intestate because they don’t know how to draft a will or are intimidated by the costs of drafting one.

Is your home correctly priced for the current market?

The property market is typically in either one of two phases, a buyers’ market or a sellers’ market. According to real estate experts, we are currently in a buyer’s market. For this reason, it is important as a seller to correctly price your house to ensure interested buyers and a valuable sale in the end.

Fuel rewards programme – how to fill up on petrol and points

South Africa’s volatile economy has often meant that factors like the fuel price bear the brunt. This year alone the country’s fuel price has fluctuated by between R1.50 to almost R3, which has put increasing pressure on motorists. That said, many of the bigger South African brands have provided some relief by way of fuel rewards programmes.

Deals

Wax On Wax Off Wednesdays at Rouge Day Spa

Price: From R50
When: Wednesdays
Where: Cape Town

Aarya Restaurant Christmas Lunch Special

Price: R425
When: 25 December 2019
Where: Johannesburg

Da Vinci’s Tantalising Tuesday Pizza Special

Price: Available on request
When: Tuesdays
Where: Cape Town