Cape Town – The beverage industry has used “massive scare tactics” to fight a tax on sugary drinks, but it must now “come to the party” and cut the sugar content of its drinks.
Treasury deputy director-general Ismail Momoniat told this to Parliament’s standing committee on finance on Thursday.
“They have been talking to farmers, saying they won’t buy their sugar, going to little stores in townships saying the tax will cost them money, and handing forms to workers, saying they will lose their jobs,” said Momoniat.
“This is damn irresponsible.”
Last year, the Treasury proposed a taxation rate of almost 20% on a 340ml can of Coke. But it revised this in February, proposing to exempt the first 4g of sugar per 100ml. This means that the tax rate on a can of Coke is now around 10%.
Former tourism minister Derek Hanekom, making his debut as a member of the committee, said he was “not convinced about industry’s job-loss argument”.
“What about the productivity losses and the very high health costs caused by non-communicable diseases?” asked Hanekom.
Meanwhile, Lynn Moeng, the Health Department’s chief director of nutrition, said she was “saddened by the reduction in the sugary drinks tax”.
“It is a critical step to address obesity."