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A Water Shortage for South Africans and Now Tax on Sugary Beverages!

26 Feb 2018

Apart from the water shortage in the Western Cape and the effect of the 1% VAT increase following the budget speech, South Africans will now be paying more for sugary drinks.

One of the reasons for government implementing tax on sugary drinks is that obesity has become a major concern in SA, therefore to address this problem together with a means of raising revenue, government has implemented tax on sugary beverages, with effect from 1 April 2018.

So what exactly are sugary beverages?

Sugary beverages include but are not limited to soft drinks, fruit drinks, sports and energy drinks, sweetened ice tea and lemonade. Interestingly, 100% fruit juices and milk are excluded, even though health experts have argued that 100% fruit juices have the same health consequences as soft drinks.

South Africans may have noticed that the size of certain sugary drinks have noticeably decreased from 550ml to 330ml over the past year but without a price decrease.

The tax will be levied at 2.1 cents for every gram above 4g per 100ml. For example if a can of coke is 330ml and has just over 8 teaspoons of sugar (1 teaspoon being equal to 4grams) only 3 teaspoons will be tax free because its 330ml and the other 5 teaspoons will be taxed at 2.1 cents, resulting a sugar tax of 46cents.

Tax on sugary beverages as a measure to decrease obesity is not an entirely new strategy. Tax on sugary beverages has already been implemented by countries such as Finland, France, Hungary, Ireland, Mexico, Mauritius and Norway. As a result, the purchases of sugary beverages in these countries have decreased considerably.

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