THE “fear-mongering” tactics employed by the beverage industry against the proposed sugar tax have been “shocking” and “more than the norm”.
This is according to Ismail Momoniat, deputy director- general of the National Treasury, who was commenting on the industry’s reaction since Finance Minister Pravin Gordhan announced the tax earlier this year.
The tax will result in all sugar-sweetened beverages being taxed by 20 percent from April.
The tax is an effort to combat the country’s growing non-communicable diseases (NCDs) epidemic, including obesity, diabetes and heart disease.
By their August 22 deadline this year, the Treasury had received 190 written submissions on the tax.
Apart from the submissions, the beverage industry has held media briefings, and gone into communities to speak to local spaza shop owners in an effort to increase the voices of dissent against the tax.
BevSA argued that the proposed tax could lead to between 60 000 and 72 000 job losses, and would reduce the industry’s contribution to the country’s GDP by R14 billion.
“Industry backlash is inevitable… The process to impose or increase tax is always deeply contested, but it seems the scare tactics here have been more than the norm,” Momoniat said during an obesity-prevention workshop in Parktown, Johannesburg, yesterday.
Last month, the South African Institute of Race Relations (IRR) said the tax would do “almost nothing” to improve the health of South Africans, but rather was an attempt to raise more money by “a desperate government” that was running short of revenue.
But Momoniat denied this. He said while the Treasury had not yet put an estimate on how much revenue would be generated by the proposed tax, even if it had, the main aim of the tax was not to generate revenue but to deal with obesity and to discourage poor diets.
However, no health-related programmes have been earmarked for the revenue from the tax.
“Our main fiscal tool to prevent illnesses in this case is tax… The estimated revenue from the tax is R4 billion, which is not a Treasury figure.
“But even then, that wouldn’t be much compared to the trillions we raise through the three major taxes (personal tax, VAT, corporate income tax),” he added.
Source: Cape Times