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Gordhan: Govt will forge ahead with sugar tax in 2017

A sugar tax proposal on sugar-sweetened beverages only is already under discussion in Parliament.

Picture: Freeimages.com

CAPE TOWN – Finance Minister Pravin Gordhan says government will forge ahead with the introduction of a sugar tax this financial year.

But it has made some concessions with regard to the rate at which it will levy the tax.

For now, it will still only apply to sugar-sweetened beverages.

But Treasury officials have hinted that this could change in future.

A sugar tax proposal on sugar-sweetened beverages only is already under discussion in Parliament.

And on Wednesday, the minister said that Treasury had decided to make some revisions to the design of the tax.

A broader World Health Organisation definition that includes intrinsic, as well as added sugars will now be used.

It’s also been decided to reduce the rate at which the tax will be charged from 2.29 cents per gram to 2.1 cents.

The tax will be charged only when the sugar content exceeds four grams per 100ml of a beverage.

Only 50% of the rate will apply to concentrated beverages such as cordials.

Gordhan says Treasury’s preliminary socio-economic assessment has revealed a relatively small effect on job losses.

Minister Gordhan says the revenue raised will be used to support programmes to combat non-communicable diseases.

(Edited by Masechaba Sefularo)