South Africa’s Sugar Tax Approaches

September 6, 2017 Taxation in South Africa

tax on sugary drinksJOHANNESBURG – South Africa’s sugar tax will come into effect in April 2018, however, nobody knows exactly what the tax will look like.

At a joint meeting of Parliamentary health and finance committees in South Africa it was indicated that the country’s proposed tax on sugar sweetened beverages may come into force by April 2018.

However prior to the tax being enacted, the government must still decide on the exact rate of the new tax.

Initially the government hoped to introduce the tax at a rate of 20 percent.

Currently, the government’s proposal has been diluted to a rate of 10 percent at the time of introduction, with gradual increases to the rate as time goes on.

Alternatively, industry leaders are calling for the government to introduce a further watered down tax which would reach the currently proposed rate over the course of three years.

The tax is aimed at reducing eh consumption of sugary drinks, with the ultimate hope of reducing the instance of non-communicable diseases.

On 2015 alone it is estimated that non-communicable diseases cost the country 7 percent of its GDP due to sickness and early retirement.