South Africa mulls sugar tax on sweetened drinks; Makes details of proposal available for public comments

The South African Treasury made public on Friday details of a proposal to apply a 20% tax on sugary drinks to stem the tide of obesity and its effects on the population such as diabetes, high blood pressure, stroke and others.

According to Treasury data, 55% of South Africans (42% women and 13% men) are overweight.

The details of the tax plan made public on Friday follows a proposal made in February by the country’s Finance Minister, Pravin Gordham in his budget. In the plan which would go into effect on April 1, 2017, the government will levy a roughly 20% tax on sugary drinks like a can of Coca-Cola, which contains about 35 grams of sugar. This would make the South African rate one of the highest in the world and a first in Africa.

The tax would apply to sweetened beverages such as soft drinks, fruit drinks, vitamin and sports drinks, ice teas and drinking yoghurt or any beverage that contain caloric sweeteners such as sucrose, high-fructose, corn syrup, or fruit juice concentrate. However, it will exclude beverages that contain only “natural” or “intrinsic” sugars such as 100% fruit juices, unsweetened milk and bottled water.

Health campaigners hailed the proposal while the beverage industry said they are dismayed, calling it “discriminatory” and bound to fail. The association, whose members include global soft drinks producers such as Coca-Cola, PepsiCo and SABMiller, met with Treasury officials about the tax in April.

“The proposed tax … comes against the backdrop of a growing global concern regarding obesity stemming from over-consumption of sugar,” the Treasury said on its website.

Other countries that have imposed sugar tax on sweetened beverages include Mexico, 10%; France and several states in the US. The UK is weighing the idea.

The Treasury is soliciting comments from the public on the proposal until August 22, 2016.

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