South African formal businesses selling carbonated sugar drinks is estimated to suffer a R1.4 billion loss in revenue, should a “sugar tax” be implemented, National Treasury said on Tuesday.
Treasury officials participated in public hearings on the proposed tax on sugar beverages before the standing committee on finance as well as the health portfolio committee, providing MPs with an analysis of the socio-economic impact of the policy proposal.
The analysis document tabled during the hearings states: “Higher prices discourage consumption of soft drinks, with lower income households most affected.”
“Overall, the impact of the tax is negative, but relatively small, real Gross Domestic Product (GDP) is 0.02 percent lower compared to the no-tax baseline,” said National Treasury.
-African News Agency (ANA)
