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Sugar tax: Treasury to release impact study

Cape Town - The National Treasury will publish a socio-economic impact study on its proposed tax on sugar sweetened beverages.

Treasury’s Mpho Legote, speaking at a tax panel discussion held on Thursday, stated that such a study will be released in due course.

The need for an impact assessment study has been strongly advocated by the industry and other independent organisations.

Multiple parties at the panel session emphasised the need for an impact assessment study, including KPMG’s chief economist, Lullu Krugel and Leon Louw of the Free Market Foundation.

Legote said Treasury intended hosting a workshop in November this year where both parties will deliberate on the sugar tax issue.

"Studies commissioned by BevSA have indicated that the beverage industry stands to lose in excess of 60 000 jobs across its value chain", said BevSA executive director Mapule Ncanywa.

She also warned that if sugary tax is implement, the country will lose the industry's R14bn contribution to the economy.

Announcing its formal response to National Treasury’s policy paper on a sugar tax in Sandton, BevSA  explained that in its view, the proposed SSB tax could hurt the SA economy, exacerbate the broader fiscal and societal costs associated with unemployment, increase the burden on consumers with 25% price increases and damage the competitiveness of the non-alcoholic beverage industry. Additionally, it cautioned that 10000 small businesses may close.

Finance Minister Pravin Gordhan in his February 2016 Budget announced a proposal to introduce a tax on SSBs with effect from April 1 2017 to help reduce excessive sugar intake in one of Africa’s most obese nations. 

The tax policy forms part of the Department of Health’s strategic plan for the prevention and control of non-communicable diseases.

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