Reportedly set to be implemented sometime next year, this tax was motivated by government’s efforts to reduce obesity in South Africa.
BevSA recently published a comprehensive report on why it was strenuously opposed to the proposed tax, stating that it would result in a 25% weighted price increase of sweetened beverages. This would in turn likely lead to a 33% decrease in national sales, amounting to annual revenue losses to the industry of R12,8 billion.
According to BevSA, this would lead to indirect economic losses to South Africa of approximately R14 billion annually. Approximately 68 000 direct and indirect jobs would be lost, and government would lose billions of rands in income from other taxes.
“Spaza shop owners and small-scale farmers will be hardest hit by the tax,” BevSA’s report said.
Meanwhile, Engineering News reported that the National Treasury had confirmed that it would be holding a stakeholder workshop in November to discuss the proposed tax.