Government has decided to implement the Health Promotions Levy, which came to effect from 1st April 2018. The tax is imposed on Sugar Sweetened Beverages and will mainly affect the non-alcoholic beverage industry. The objective of the tax is to reduce the rate of non-communicable diseases and obesity in the country. In this regard the South African Revenue Service (SARS) has issued rules, which govern the management of the tax.
The rules determine that any person who manufactures or imports any sugary beverage that is liable to the levy on sugary beverages must determine and declare the sugar content of the sugary beverage.
The Beverage Association of South Africa is committed to comply with the tax and continue to support government efforts to achieve better health outcomes and for people to live a long and healthy life for all South Africans.
In the ten months since the Health Promotions Levy (HPL) was introduced, it has put pressure on the local non-alcoholic industry in already difficult operating conditions, as well as raising prices for hard-pressed consumers. The net impact of the levy has been compounded by subdued economic growth in the country and higher input costs of raw materials and ingredients, in particular, sugar. Consequently, this is limited the opportunity for growth and job creation in the sector and has resulted in downward pressure on the full value chain.