Parliament’s Standing Committee on Finance will, on Tuesday, hold the first round of oral submissions as part of hearings into a proposed tax on sugar sweetened beverages (SSBs).

In a bid to curb South Africa’s high obesity rate, government has proposed a 20% tax on sugary drinks, which will be levied from April.

“We have received 37 requests for oral submissions; however, only 15 submissions from stakeholders can be considered on Tuesday. We will organise further hearings to allow for other stakeholders who have applied to make oral submissions as well,” Finance Committee chairperson Yunus Carrim said in a statement.

He added that Tuesday’s proceedings were initial hearings for the committees to get a sense of stakeholders’ views, highlighting that “no decisions will be made at this stage.”

“Those making submissions on Tuesday represent a balanced range of sectors and views. Everybody who has asked to make oral submissions will be accommodated,” he said.

COST-BENEFIT ANALYSIS

Health awareness organisation, the Healthy Living Alliance South Africa (Heala), meanwhile, has said it supports a tax on SSBs as it believes sugary drinks are a major cause of obesity in the country.

“In South Africa, a tax of 20% on sugary drinks is estimated to reduce obesity by 3.8% in men and 2.4% in women, resulting in 220 000 fewer obese adults,” the organisation said in a statement.

According to research conducted by Heala, sugary drinks taxes are particularly effective in reducing consumption and improving health among lower-income consumers, who are more responsive to price increases and also suffer disproportionately from the ill effects of obesity.

“Sugary drinks taxes increase public awareness of the harms of sugary drinks and incentivises the beverage industry to reformulate their products and market healthier beverages.”

It further added that, not only would a tax on SSBs lower consumption of such beverages, it would also generate significant new revenue to fund important health programmes.

“It is critical to note that any tax on sugary drinks should include all forms – sodas, energy drinks, fruit juices, waters, sports drinks, powders and concentrates,” the organisation said.

The Beverages Association of South Africa (BevSA) and the South African Sugar Association (Sasa) have previously expressed their concern over the proposed tax, with BevSA stating, in August 2016, that such a tax would cut the beverages industry’s contribution to South Africa’s gross domestic product by R14-billion and contribute to between 62 000 and 72 000 job losses.

Sasa, meanwhile, said the proposed tax would also have a widespread impact on the sugar industry, which supplies some 620 000 t/y to the SSB sector.