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ANC calls for more research on sugar tax

Nov 29 2016 18:27
Liesl Peyper
Cape Town - The ANC in Parliament wants more research done before a sugar tax is implemented. The tax is supposed to come into effect in April 2017.


Sfiso Buthelezi, ANC MP and a member of the standing committee on finance, said timing is critical. “Should we introduce it amid low growth and high unemployment?”

MPs debated the Taxation Laws Amendment Bill and the Tax Administration Amendment Bill to allow for among other things a sugar tax and an extension of the Employers Tax Incentive (ETI).

Buthelezi in his speech said before a sugar tax can be implemented, there should be more clarity on the price elasticity of sugar demand, the impact a sugar tax may have on employment creation and its effect on complementary goods.

Imam Sheik Mansour of the National Freedom Party, however, welcomed the imminent introduction of a sugar tax in his speech, saying it’s a false perception that it will lead to job losses. He accused conglomerates of using the job losses argument to hinder the implementation of such a tax.

Employers Tax Incentive

Alf Lees from the Democratic Alliance (DA) said in his speech that his party welcomes the extension of the ETI for a further two years. “This is tax well spent as it stimulates jobs for the 57% of young people in South Africa who are not registered on the tax database.”

Lees said it was thanks to the DA that the ETI was eventually implemented.

He said the DA welcomes the changes contained in the two bills -  such as accelerated capital allowances for renewable energy projects, and the inclusion of infrastructure spends in terms of social labour plans by mining companies - as tax-deductible expenses.

The party also welcomed the extension of the relief from capital gains tax to other land reform initiative,s and that it will no longer be restricted to land restitution projects.

“The DA hopes that this will encourage more land reform projects in order to address the vital land reform imperative in South Africa. Land reform, despite the land rhetoric from the ANC, has all but stalled under the regime of President Zuma,” Lees said.

Mkhuleko Hlengwa from the Inkatha Freedom Party said his party is happy about the extension of the ETI for another two years, as it clearly boosts employment of young people and the transfer of skills.

“We want to encourage small business to make use of this programme, as they have a role to play. Big business isn’t the silver bullet to everything.”

“The ETI’s a toddler by any standards and has teething problems. However, fortunately the concerns raised are being answered now,” said the ANC’s Dikeledi Mahlangu.

She added that although the ETI is a sound incentive, it doesn’t mean it is “free from abuse from unscrupulous employers”.

“We have therefore asked National Treasury to be vigilant,” she said.

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