The Standing Committee on Finance voted yesterday (7 November) to adopt the Rates and Monetary Amounts and Amendment of the Revenue Laws Bill, which includes the sugary drinks tax.
The Bill will go first to the National Assembly then to the National Council of Provinces before the month is out.
“We know everyone has grievances [against the tax] but this was the best we could do with the current balance of forces,” said committee chairperson Yunus Carrim. “We can’t tell its impact yet, so Parliament will need regular reports on the impact of the tax on job losses and on health.”
The committee has overseen four public hearings as well as an elaborate negotiation process in the National Economic Development and Labour Council (Nedlac).
“This is the first time in 23 years that a tax law has been negotiated in Nedlac,” said Cosatu’s Matthew Parks.
Parks said the federation was pleased that government had made concessions on its original proposal of a 20 percent tax on all sugary drinks.
“Government has reduced the tax to 10 percent, exempted the first 4g of sugar per 100ml and excluded 100 percent pure fruit juices from the tax,” said Parks.
“Nedlac has adopted a jobs plan to mitigate against job losses. There has been an underlying crisis in the sugar industry since 2000 and around 20,000 jobs have already been lost, mainly because of cheap sugar being imported,” said Parks. “The jobs plan negotiated in Nedlac includes that the import tariff on sugar must be increased and that government must help small sugar farmers.”
Health promotion levy
We are confident that members of parliament will put the health of the millions of people who elected them before the narrow interests of the beverage and sugar industries and pass the bill as it stands.”
Other measures include an undertaking by the beverage industry to manufacture the labels for its plastic bottles in South Africa and to use locally produced phosphate in its production.
However, Parks said that Cosatu supported the health goal of the tax – which has been renamed a ‘health promotion levy’.
“There needs to be a meaningful commitment from government to ensure that the income foes towards health,” said Parks. “The Department of Health needs to have a public education campaign, particularly in schools, to change people’s behaviour.”
Carrim said the committee had considered four main issues in relation to the tax: “The impact on job losses, the impact on small African emerging farmers, what the Department of Health is doing to create awareness about the dangers of sugary drinks and how the levy can be used to address obesity.”
Meanwhile, the Democratic Party’s Alf Lees said the DA caucus had yet to decide whether to support the tax.
“We are confident that members of parliament will put the health of the millions of people who elected them before the narrow interests of the beverage and sugar industries and pass the bill as it stands,” said Healthy Living Alliance (HEALA) co-ordinator Tracey Malawana.
Heart disease, diabetes, stroke and other obesity-related diseases account for about 55% of deaths in South Africa. Diabetes alone claimed more than 25 000 lives in 2015, according to Statistics SA. Some 10 000 new cases are diagnosed at public health facilities each month.
South Africans are among the top 10 consumers of soft drinks in the world and research has shown that drinking just one sugary fizzy drink a day increases the chances of being overweight by 27% for adults and 55% for children, according to HEALA. – Health-e News.