Photo by: Bloomberg
South African formal businesses selling carbonated sugar drinks is estimated to suffer a R1.4-billion loss in revenue, should a “sugar tax” be implemented, the National Treasury said on Tuesday.
Treasury officials participated in public hearings on the proposed tax on sugar beverages before the standing committee on finance as well as the health portfolio committee, providing MPs with an analysis of the socioeconomic impact of the policy proposal.
The analysis document tabled during the hearings states: “Higher prices discourage consumption of soft drinks, with lower income households most affected.”
“Overall, the impact of the tax is negative, but relatively small, real gross domestic product (GDP) is 0.02% lower compared to the no-tax baseline,” said National Treasury.