South Africa Will Launch Sugar Tax

February 26, 2016 Taxation in South Africa

PRETORIA – Within one year South Africa will see a new tax on the sale of sugary drinks, despite claims that such measures don’t lead to any health benefits.

On February 25th the Minister of Finance of South Africa Pravin Gordham announced that in 2017 the government will launch a tax on the sale of sugar sweetened beverages.

The tax will be levied on the sale of all sugar-added soft drinks, juices, energy drinks, ice teas, and cordials, from April 1st 2017.

The tax is intended to reduce the consumption of sugar sweetened beverages in order to curb the excessive consumption of sugar in the country.

The rate of the new tax has not yet been confirmed, but previous estimates indicate that a tax rate of 20 percent would raise tax revenues of SAR 450 million per year, and would help reduce the national level of obesity by 220 000 adults.

The new tax was instantly met with opposition from the Beverages Association of South Africa which claimed that similar measures have already been implemented in other countries, but there has not yet been any evidence that a sugar tax leads to reduced calorie intake.

Photo By: Umberto Salvagnin