How the sugar tax will work

15 December 2017 - 19:01
By Katharine Child
File photo.
Image: AFP Relaxnews ©JPC-PROD/ File photo.

The sugary drinks tax to be paid by beverage manufacturers from April 1 next year is now law after the details were gazetted on Thursday by treasury.

The details in the Rates and Monetary Amounts and Amendments of Revenue Laws Act explains that the tax is fixed at 2.1 cents per gram of the sugar content that exceeds four grams per 100ml‚ which means the first teaspoon of sugar in 100ml is levy free.

All manufacturers of sugary beverages must register in February‚ but only those who produce beverages with more than an annual content of 500kg will be taxed. This means micro manufacturers of drinks will be exempt.

The South African Revenue Service (Sars) said in a press release that "it will engage industry stakeholders during road shows to guide them through the process".

The Healthy Living Alliance (HEALA) said although the tax was the right move for South Africa to take‚ given its burden of non-communicable diseases and obesity‚ but the tax was too low.

HEALA co-ordinator Tracey Malawana said: “While the levy is a victory for public health‚ we still believe that it should be increased to 20% in order for it to have a significant impact.”

She said that health professionals had expressed their view during the extensive public consultative process that sugary drinks should be taxed at least 20% to curb obesity.

“HEALA will continue to advocate for a stronger tax in the coming year and we will also be monitoring government spending to ensure that the proceeds from the tax will be spent on health promotion‚” Malawana added.

Fruit juices are still exempt from the tax despite health professionals repeatedly pointing out that fruit juice is as bad for a person as highly sugary drinks – if not worse because the liver struggles to digest the excessive fructose. Aviva Tugendhaft‚ a senior researcher at Priceless-SA‚ a research unit based at Wits University School of Public Health that called for the tax‚ previously explained that: “One 330ml serving of a fizzy sweetened drink contains an average of eight teaspoons of sugar and the same size fruit juice contains an average of nine teaspoons of sugar.”

The initial 2014 academic paper that called for a sugar tax found a 20% tax would result in a 3.8% reduction in obesity in men and a 2.4% reduction in women‚ translating in a decrease of more than 220 000 obese adults in South Africa.

“While sugary sweetened beverages alone may not be the only reason for an increase in body fat‚ these fizzy drinks do not contain any essential nutrients‚ have high sugar content and a strong link to weight gain. Drinking just one sugar sweetened beverage a day increases the likelihood of being overweight by 27% for adults and 55% for children‚” said Wits Professor Karin Hofman‚ senior author of the paper and director of Priceless-SA.