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Gordhan announces date for proposed sugar tax

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Gordhan announces date for proposed sugar tax

Photo by Bloomberg

24th February 2016

By: African News Agency

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A proposed date for the enforcement of a “sugar tax” was announced by Finance Minister Pravin Gordhan on Wednesday during his 2016 Budget Speech, as he sought to raise additional revenue and at the same time effect public health and social wellbeing.

If passed, a tax on sugar-sweetened beverages (SSBs), or a “sugar tax”, would come into effect April 1, 2017.

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The proposed tax, predicted to be 20 percent, was in line with the country’s need to raise additional revenue and reduce the budget deficit.

In addition to raising revenue, the sugar tax would also assist in tackling obesity, the budget review said.

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South Africa is ranked the worst in sub-Saharan Africa for obesity. The country has also been ranked second in the world for deaths related to sugary drinks, below only Mexico.

In December 2015, the Department of Health published a policy paper on the problem. In it, the department set out its intention to reduce obesity by 10 percent come 2020.

Treasury was assisting the department in their goal with the fiscal intervention which was “increasingly recognised as complementary tools to help tackle this epidemic”.

The Congress of the People (COPE) have in the past thrown their weight behind the proposal while the official opposition, the Democratic Alliance (DA), have labelled sugar tax “regressive”.

Despite the purported benefits – both health-related and economic – the DA have argued that the sugar tax would drive up food prices, severely affecting the poor.

They have instead proposed a holistic healthy lifestyle campaign, led by politicians making necessary dietary and exercise changes to their lives.

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