Proposed sugar tax ‘treating us like children’

THE proposed sugar tax is a “bad idea” because punitive taxes have proved not to work.

Also, the introduction in April of the 20 percent tax on sugar-sweetened beverages could lead to the illegal production and smuggling of sugar.

“That’s what happens when you push prices too far,” says Professor Brian Kantor, chief economist and strategist at Investec.

Sugar industry stakeholders are fighting the National Treasury’s plans to introduce the tax, one of the measures the national Department of Health hopes will help to curb obesity, diabetes, heart disorders and other lifestyle diseases.

“Why should the government be telling people how to lead their lives? We all know sugar is bad for you. Why should we be told as if we were small children?” Kantor said.

He dismissed the tax as a convenient way for the government to collect revenue. The government needed to follow the value-added tax principle, he said.

The Institute of Race Relations shares this view. “The government must interfere as little as possible with prices. They should collect revenue with little interference of how the economy works.”

In its report paper on the proposed tax, the institute says it would do “almost nothing to improve the health of South Africans”.

It says the proposal is rather an attempt, by a “desperate government running short of revenue”, to raise more money.

The tax would place greater financial pressure on stressed households and “worsen” their socio-economic position.

Experience had shown that such taxes worked “badly” in countering obesity.

“Despite their ineffectiveness, sugar taxes get by far the most media attention – while more successful interventions are largely overlooked.”

Attempts to get comment from Mapule Ncanywa, executive director of the Beverage Association of SA, were not successful. The association has said the tax could lead to the loss of between 62 000 and 72 000 jobs.