The Democratic Alliance (DA) will reject Pravin Gorghan’s proposed sugar tax if its purpose is “simply to raise more revenue under the fig leaf of a public health benefit”.The party’s Dr Wilmot James said on Tuesday that it had “made submissions on the proposed Taxation of Sugar-Sweetened Beverages (SSBs)‚ which was gazetted by National Treasury for public feedback on July 8”.Treasury's sugar tax may prove bitter pill for cooldrink makersCoca-cola Beverages Africa is likely to be most affected by the proposed sugar tax as it leads the soft drinks market in South Africa and, unlike other soft drinks manufacturers, it doesn't have a diversified income stream.The proposal was announced in Finance Minister Gordhan’s budget speech in February‚ and “Treasury estimates that the sugar tax could add about R11-billion to the fiscus”.James said a “meaningful portion of this revenue should be ring-fenced for medical research”‚ and posited that “if the tax is clearly structured to fund medical research on obesity‚ diabetes‚ hypertension and social habits that result in an increase in body mass index (BMI)‚ its purpose would be more defensible”.The party’s concern‚ he said‚ was job losses as a result of the tax and that it “could pose a threat to the survival of small businesses and spaza shops‚ as revenue from sweetened drinks represents a large percentage of their revenue”.James said that rather than seeing the “beverage industry as an enemy of change”‚ the sugar tax should be “structured to encourage product innovation”.“This would entail a graduated tax on manufacturers that would prompt companies to innovate and develop their product range to include drinks that fall under a proposed sugar threshold that attract no additional taxes‚” he explained.“Consideration should also be given to direct tax proceeds towards assisting schools to promote exercise and expanding the range of nutritious food and drink offerings at tuck shops.”  ..