The Beverage Association of South Africa (BevSA) has noted with concern that President Jacob Zuma has assented to the Rates and Monetary Amounts and Amendment of Revenue Laws Bill passing into law. This law gives effect to the Health Promotion Levy (HPL) which the beverage industry has serious reservations about. Signed into law on Thursday, 15 December 2017, the act will come into effect on the 1st of April 2018.
BevSA, the sole representative of the non-alcoholic beverage industry, had hoped that the South African government led by the President would have substantively interrogated our submissions on the levy before signing the bill into Law. Over the years, BevSA together with Labour have developed and is implementing alternative initiatives that seek to protect jobs, while fostering the intended health benefits of the levy. For such a commitment, the industry has arranged to be independently monitored by organisations such as the South African Bureau of Standards (SABS) to ensure that all commitments are met.
Key to BevSA’s submissions was the industry’s call for government to commission a proper substantive Socio-Economic Impact Assessment study (SEIA’s) to avoid the potentially devastating effects it will have on the economy. Such a study could have mitigated the unintended potential loss of thousands of jobs across the value chain and billions of rands to the gross domestic product (GDP).We believe the levy in its current form will worsen the status quo and undermine the country’s economic recovery plans to create and retain jobs.
“Since the announcement of the HPL in the National Budget in 2016, BevSA has been participating in various engagement efforts which included parliament, government, business, labour, consumers and the informal sector with the view to persuade and demonstrate the negative impact and consequences attached to the HPL. The industry has to date and will continue to participate in Nedlac processes which aim to save jobs and ensure health benefits across our product range,” said Mapule Ncanywa, Executive Director BevSA.
Ncanywa further notes that, despite the commendable gains the association has achieved thorough Nedlack processes, there has been no agreement on matters related to the HPL, nor has these processes progressed as instructed by and communicated to Parliament. As a result, the industry is deeply concerned about the information and process which has led to the adoption of this bill. There has been undeniable evidence of the failure of similar taxes in other markets around the world.
“Although we are dissatisfied and disappointed we remain committed to engaging with government and assist where we can to achieve the objective to reduce obesity by 10% by 2020. We remain hopefull that there is still room for engagement and we can still find each other before the anticipated implementation of the levy in April 2018 which in its current form will lead to job losses that could have been mitigated while still reducing the sugar content needed for obesity reduction ” adds Ncanywa. The Industry will reconvene and consider a way forward in the midst of this reality, and thereafter engage different stakeholders on how we need to proceed in dealing with the impeding implementation come April 2018.
Issued by The Communications Firm on behalf of BevSA
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