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Sugar tax delayed until April 2018

Publish date: 11 September 2017
Issue Number: 742
Diary: IBA Legalbrief Africa
Category: South Africa

Treasury deputy Director-General Ismail Momoniat has announced the implementation of the health-promotion levy – previously known as the sugar-sweetened beverages tax – will be delayed until April 2018. A Business Day report says the proposed tax – which was initially due to come into effect in April, and then June 2017 – has been subjected to extensive consultations both in Parliament and in the National Economic Development and Labour Council (Nedlac), which is close to finalising an agreement between the government, business and labour on measures to mitigate the effect of the proposed tax on jobs and on the sugar industry as a whole. 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. Momoniat and Treasury’s Mpho Legote briefed a joint meeting of Parliament’s Finance and Health committees on the Nedlac agreement thrashed out by a task team. Several departments collaborated on a government proposal to mitigate job losses and create new jobs that would apply to the whole value chain. The plan includes urgent short- and medium-term interventions such as trade remedies to assist the declining sugar industry, including tariffs to tackle cheap imports.

Full Business Day report