Sugar tax still on the table as hearings end
The fate of legislation to tax sweetened beverages remains undecided after parliamentary hearings ended inconclusively on Tuesday.
MPs across the political spectrum seem to agree that some sort of intervention is necessary to tackle the harmful effects that sugar-sweetened beverages have on health, particularly obesity and noncommunicable diseases.
However, some are arguing for a package of measures rather than just one aimed solely at sugar.
The proposal has been on the table since July 2016, with the tax rate being amended in the February budget, from 2.29c a gram of sugar to 2.1c a gram and a threshold of 4g of sugar per 100ml was introduced, below which the levy would not be imposed.
Finance committee chairman Yunus Carrim suggested an option of having the tax for a two-year trial period after which the executive would be forced to undertake a review of its effect, though this will have to be discussed when the committee deliberates on the proposal.
Next week, the finance committee will hear the Treasury’s response to the presentations for and against the tax made by health practitioners and industry respectively after which MPs will have to reach a decision.
The hearings saw another confrontation between the two sides, with industry at pains to propose an alternative in a bid to balance the competing imperatives of health and the protection of jobs in the sugar industry.
Tshepo Marumule, Beverage Association of SA GM for corporate services, called for multifaceted intervention that would include reformulating sugary drinks to reduce their sugar content, reducing the size of packs, promoting nonsugar options, halting the marketing of sugary drinks to children and promoting healthy lifestyles. The industry was working with the Department of Health on new regulations for labelling.
The association has recommended that the government enforce the industry’s commitments through regulations and should monitor performance.
Coca-Cola Beverages SA MD Velaphi Ratshefola said the company was asking for an enabling regulatory framework instead of a “punitive and regressive” tax. Penalties should be imposed on firms that failed to comply with the stipulated quantity of sugar per 100ml of liquid. construction had also been designated for government procurement, he said.
The competition issues involving ArcelorMittal had also been dealt with and the company had been required to pay a R1.5bn fine for violating the Competition Act.
Davies said that the government provided investment support to steel producers through incentives under section 12 (i) of the Income Tax Act and incubation support for small and medium enterprises.
He noted that the Department of Trade and Industry was finalising an application to the Treasury for an export tax on scrap metal and was working with other departments and agencies to ensure stronger policing of steel imports.
In addition, efforts were being made with industry associations to boost the exports of high-value steel products to regional infrastructure and mining industries.