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South Africa to get new tax on sugary drinks

The banters are going to be smug: from 1 April 2016, South Africa will have a higher tax on sugar-sweetened beverages. The new tax was announced by finance minister Pravin Gordhan in his budget speech on Wednesday.

According to Fin24, the tax will target soft drinks, sports and energy drinks, vitamin waters, sweetened ice tea, fruit juices, cordials and squashes. These sugar-sweetened beverages (also known as SSBs) are blamed for putting drinkers at a high risk of diseases like diabetes, stroke and obesity, and researchers at WITS have estimated that a suggested 20% tax on SSBs could reduce obesity in 220 000 adults. Health sociologist Aviva Tugendhaft said preliminary estimates suggest that the tax could also generate an additional R7bn per year. The sugar industry, however, could take a hit, economists warn.

In addition to the tax on sugar, Gordhan announced higher taxes on alcoholic beverages. The tax on a 340 ml can of beer is set to rise by 8.5%, a litre of wine by 8%, and spirits 8.2%. Tax on ciders and alcoholic fruit beverages will rise by 8.5%. Tax rates on alcoholic beverages have consistently been increased beyond inflation since 2002.

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