In his budget speech recently, Finance Minister Pravin Gordhan announced that a sugar tax will be levied with effect from 1 April 2017. A sugar tax has been mooted by a growing number of consumer bodies and health experts who have been calling for a tax on sweetened sugar beverages (SSBs) to help curb the tide of obesity in SA, which is the foremost cause of obesity in Sub-Saharan Africa.
“This year, in view of the need to raise additional revenue and reduce the budget deficit, we have paid special attention to the fairness and inclusivity of the tax system,” stated Gordhan.
Among the tax proposals put on the table by the minister is an “introduction of a tax on sugar-sweetened beverages”. Consuming large amounts of sugar puts people at high risk for lifestyle diseases like diabetes, stroke and obesity. Research by the University of Witwatersrand found that a suggested 20% tax on SSBs could possibly reduce obesity in 220 000 adults.
SSBs include the following: still and carbonated soft drinks, fruit juices, sports drinks, energy drinks and vitamin waters, sweetened ice tea, lemonade, cordials and squashes. Other countries that have introduced a sugar tax include France, Mexico and several states in the US.
“We’re very impressed with Treasury for taking this step forward,” said health sociologist Aviva Tugendhaft, deputy director of research program. She added they will continue to provide evidence that supports this approach.”Our research shows the significant impact that a SSB tax will have on improving the health of the country and generating revenue,” continued Tugendhaft. “In order for the full health benefits to be achieved a SSB tax will need to be part of an even wider comprehensive approach to address obesity and its related diseases.”
Meanwhile, smokers and drinkers will again be heavily taxed. The duty on a packet of 20 cigarettes will up from R12.43 to R13.24, and that on a can of beer (340ml) from 124c to 135c.