SA sugar tax to cost 70 000 jobs

Lesotho Times - - Business -

THE Bev­er­age As­so­ci­a­tion of SA, whose mem­bers in­clude al­most all man­u­fac­tur­ers of non­al­co­holic drinks in the coun­try, has warned that up to 70,000 jobs in the in­dus­try could be lost if the Trea­sury’s mooted tax on sugar-sweet­ened drinks were im­ple­mented in its cur­rent form.

This is the first time the in­dus­try has put a num­ber to the po­ten­tial ram­i­fi­ca­tions for em­ploy­ment since the pro­posed tax was pub­lished for pub­lic com­ment in July.

The find­ings are based on an in­de­pen­dent study con­ducted by Ox­ford Eco­nomics and com­mis­sioned by the as­so­ci­a­tion.

The study found the pro­posed tax would re­sult in 60,000-70,000 work­ers los­ing their jobs. About 60 per­cent of the jobs lost would be di­rect, up­stream jobs, says the report.

SA would be fol­low­ing in the foot­steps of coun­tries such as Mex­ico, Mau­ri­tius and Hun­gary, which have im­ple­mented the tax to tackle ris­ing obe­sity and di­a­betes rates.

Ex­perts fore­cast that the pro­posed levy could raise up to R4.5bn in rev­enue, re­liev­ing pres­sure on the fis­cus. How­ever, hav­ing al­ready shed about 500,000 jobs in 2016, the coun­try can ill af­ford to lose any more.

The Trea­sury’s pro­posal is for a tax of 2.9c per gram of sugar in all sugar-sweet­ened drinks. This could raise the price of pop­u­lar soft drinks, such as Coca-cola, about 20 per­cent — mak­ing the tax rate one of the high­est in the world. In Mex­ico, which has a sim­i­lar tax, the rate is about 10 per­cent.

On Tues­day, Phil Gutsche, chair­man of Coca-cola Bev­er­ages Africa, the largest bot­tler of Coke prod­ucts on the con­ti­nent, called on stakeholders to as­sist the in­dus­try in op­pos­ing the pro­posed tax to save jobs.

Bev­er­age As­so­ci­a­tion of SA ex­ec­u­tive di­rec­tor Ma­pule Ncanywa said the or­gan­i­sa­tion had told the Trea­sury on nu­mer­ous oc­ca­sions that tax­ing a sin­gle cat­e­gory of food would not be ef­fec­tive in tack­ling obe­sity and diseases, such as di­a­betes, that re­sulted from ex­ces­sive sugar in­take. Sugar-sweet­ened bev­er­ages ac­counted for only about 3 per­cent of to­tal daily calo­rie con­sump­tion, she said.

“If sugar is the prob­lem, why not go straight for the source?” asked Ncanywa.

The Food and Al­lied Work­ers Union (Fawu) said it sup­ported the gov­ern­ment’s ini­tia­tives to tackle health chal­lenges in the coun­try. But it said it would have a prob­lem with the pro­posed tax if it re­sulted in the vol­ume of job losses the in­dus­try pre­dicted.

“We can­not add an ex­tra 70,000 work­ers to our ex­ist­ing army of un­em­ployed,” Fawu gen­eral sec­re­tary Katishi Masemola said.

The dead­line for pub­lic com­ments on the pol­icy pa­per is next Mon­day. The Trea­sury has said the tax will come into ef­fect in April 2017. — Bdlive

as the de­bate over the newly pro­posed sugar tax con­tin­ues, there are fears it could lead to sev­eral busi­ness closures and thou­sands of job losses.

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