Housekeeping derails tax train
THE AMOUNT THAT THE SUGAR TAX COULD POSSIBLY GENERATE FOR THE COUNTRY’S FISCUS IN THE FIRST YEAR OF IMPLEMENTATION
The implementation date of April 1 this year for the sugarsweetened beverages tax could be postponed. This owing to concerns about the impact on local jobs amid stagnant growth, as well as the fact that there was a lot of compliance work that needed to be done before the new tax could be implemented.
Severus Smuts, Deloitte indirect tax director, said this week that there was a big debate about whether the sugar-sweetened beverages tax would achieve what it set out to do, which was to improve the health of the South African population.
Smuts expected the sugar-sweetened beverages tax to be postponed, given concerns about the impact on local jobs amid stagnant growth. Finance Minister Pravin Gordhan said during his budget speech last year that the sugar tax would be implemented on April 1.
“There are a lot of housekeeping things that they need to finetune in the legislation and the rules. That debate hasn’t been finished. There are two reasons [for the possible postponement] – is the tax going to achieve what we set out to achieve? Secondly, are you ready to put out the final legalisation?
“There is a host of compliance that needs to be done before you can start accounting for the sugar tax. “I wonder if they will implement it at all.” Deloitte is forecasting that the proposed sugar-sweetened beverages tax could garner between R4 billion and R11 billion in tax revenue in its first year.