Committee adopts sugar tax Bill

Parliament’s Finance Committee has adopted Bills that provide for the introduction of a health promotion levy (the sugar tax) as well as amending the tax exemption for income earned by South Africans working abroad, says a BusinessLIVE report. The health promotion levy is one of the provisions in the Rates and Monetary Amounts and Amendment of Revenue Laws Bill, while the tax exemption provision is contained in the Taxation Laws Amendment Bill. Both Bills will be presented to the National Assembly for debate and adoption. The report notes there has been intense debate about the health promotion levy, which has been proposed in a bid to reduce the level of obesity and the high incidence of non-communicable diseases. The agricultural sector and trade unions warned of the danger of thousands of job losses, which the Treasury conceded were likely, though not to the extent predicted. The Treasury expected the levy to take effect in the first quarter of 2018. Beverages that will be exempt from the tax are 100% fruit and vegetable juices, which will be considered for taxation at a later stage, and milk products with no added sugar. Regarding amendments to the tax exemption for income earned by South Africans working abroad, the 183-day exemption would be retained and a R1m ceiling introduced on income that could be claimed under it. The measure would take effect on 1 March 2020.