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South African Sugar Tax 'To Cost 60,000 Jobs'

by Lorys Charalambous, Tax-News.com, Cyprus

18 August 2016


South Africa's beverage industry has warned of substantial job losses if the country proceeds with a sugar tax.

The industry has criticized the proposal during a consultation period that is due to end on August 22.

Supported by the Beverage Association of South Africa, Coca-Cola Beverages Africa Chair Phil Gutsche suggested at a recent press conference that those job losses in the industry could reach 60,000. Currently, the sector employs around 200,000 people.

Intended to help reduce excessive sugar intake in South Africa, a tax on foods high in sugar is seen by the Government as an effective strategy to address diet-related diseases. However, Gutsche commented that, while the country's poor would pay it, they would gain little in reduced calorie intake from a tax on sugar-sweetened beverages.

The proposed tax, which would be effective from April 1, 2017, was originally announced by Minister of Finance Pravin Gordhan in February during his 2016-17 Budget. It would be structured as an excise duty and imposed at a tax rate per gram of sugar.

TAGS: South Africa | tax | excise duty | food | ministry of finance | manufacturing | tax rates | Africa

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