Sandile Memela, a spokesperson for Sars, said the levy is part of the government’s programme to prevent and control non-communicable diseases and assist in the prevention and control of obesity.
“Only commercial manufacturers that produce sugary beverages with a total annual sugar content in excess of 500kg per year need to be licensed and pay the SBL. Non-commercial producers below this threshold will be expected to register, but will not be subject to the SBL,” Memela said.
The levy is fixed at 2.1cents per gram of the sugar content that exceeds 4g per 100ml, which means the first 4g per 100ml are levy free. In the wake of 18 months of negotiations on the tax including four public hearings and a negotiation process in Nedlac, the National Council of Provinces earlier this month passed the tax on sugary drinks, as part of the Rates and Monetary Amounts and Revenue Law Amendment Bill.
South Africa joins 30 countries worldwide to tax sugary drinks, including Portugal, India, Saudi Arabia and Thailand who have passed similar taxes this year.
President Jacob Zuma has tasked the finance ministerand Presidential Fiscal Committee to cut spending by R25billion in next year’s budget and find ways to add R15bn to the nation's revenue.
Trix Trikam, the South African Sugar Association (Sasa) executive director, said the levy will negatively affect both the sugar milling and sugar cane agricultural sectors in KwaZulu-Natal and Mpumalanga.
“Loss of revenue and reduction in sugar consumption will result in shrinkage of the industry and consequent jobs losses.
“A Nedlac Task Team came up with mitigation interventions to offset the impact of the HPL. Among those interventions is the urgent matter of curbing of the influx of sugar imports by increasing the import tariff to an appropriate level,” Trikam said.
The trade federation, Cosatu also highlighted risk to jobs following the implementation of the sugar tax.
Sizwe Pamla, a spokesperson for Cosatu, said the federation is concerned that the tax may result in further job losses and a decline in investments in an already battered economy. “We are also concerned that this tax is being introduced in a sector that has already seen thousands of workers retrenched on sugar farms and mills over the past 15 years due to a flood of cheap subsidised imports from Brazil and other countries,” Pamla said.
- BUSINESS REPORT