Supplementary Budget 2020

Sugary drinks tax a go, plastic bag levy up

Cape Town - South Africans will be paying more for sugary drinks from April 1 this year. 

Officially called the “health promotion levy”, the tax on sugar-sweetened beverages aims to reduce South Africans' sugar consumption in an effort to control the high obesity rate.  

It amounts to a tax of 2.1c per gram of sugar per 100ml, above 4 grams per 100ml. 

The new tax is expected to contribute R1.9bn in additional revenue, according to the budget, broadly in line with economists' expectations. 

This is significantly less than some initial estimates, which said the tax could bring in as much as R10bn. 

As PwC previously argued in a pre-budget briefing document, the beverage industry has already reacted to the tax. 

“Industry has recently reacted to the news of the [tax], by reducing the sugar content of popular beverages by including non-nutritive sweeteners,” it said.

“In addition to efforts to reformulate, the industry introduced smaller bottle sizes to curb excessive sugar consumption and limit the excise tax burden.”

Carbon tax 

South Africa is expected to pass its long-awaited Carbon Tax Bill this year and implement the tax in January 2019. 

The bill, which was released in draft form in December 2017, will be the subject of parliamentary hearings this year. 

To reduce littering and discourage customers from buying plastic bags, the state is also upping the plastic bag levy by 50% to 12c per bag. 

This will take effect on April 1 2018. 

As expected by some economists, the environmental levy on incandescent light bulbs will be boosted from R6 to R8 per bulb to incentivise South Africans to use more energy-efficient bulbs. 

The vehicle emission tax, which penalises cars which emit carbon dioxide above a certain limit, will also be boosted.

In addition, the state is considering an acid mine drainage levy. The levy, which has not been formulated yet, would make polluters pay for the cost of environmental damages. 

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