ConsumerTalk with Wendy Knowler

Here's how the sugar tax works in practice

The controversial tax on sugary drinks does not distinguish between artificial sugar or intrinsic sugar contents, explains tax specialist Jerome Brink.

The sugar tax came into effect on 1 April, along with the VAT increase. Brink says the tax is already being collected.

Read more: 'Health-promoting' sugar tax won't stop consumers, says tax consultant

Consumers are now being taxed at 2.1 cents per gram of the sugar content that exceeds 4 grams per 100ml, which means the first 4 grams per 100ml are levy free.

Brink advises that beverage companies have to get accreditation from regulatory bodies to confirm the sugar content in their products.

He says that it's in the best interest of manufacturers to get accredited, because in the absence of such a lab report, the product is assumed at 20g per 100ml.

Also read: Govt to use new sugar tax funds on health campaigns

In some instances, consumers have not seen a change in retail beverage prices to reflect the sugar tax.

According to Brink, retailers are not compelled to implement the tax in their pricing structure. He says manufacturers are liable to cover the cost.

However, Brink believes that manufacturers may soon push the cost onto the retailers.

The first four grams of sugar per 100ml are levy free.

Jerome Brink, Senior Associate in the Tax and Exchange Control practice at Cliffe Dekker Hofmeyr

There's no distinction between added and intrinsic sugars. If that was ever implemented there would be a lot more controversy and it would be a lot more harder to administer.

Jerome Brink, Senior Associate in the Tax and Exchange Control practice at Cliffe Dekker Hofmeyr

The manufacturers needs to get an accreditation... to get a report certificate stating how much sugar is in your beverage or product.

Jerome Brink, Senior Associate in the Tax and Exchange Control practice at Cliffe Dekker Hofmeyr

The manufactures are the ones who are inherently liable to pay over this tax.

Jerome Brink, Senior Associate in the Tax and Exchange Control practice at Cliffe Dekker Hofmeyr

Brink fields several questions from callers relating to the sugar levy and other consumer tax issues.

Take a listen to the discussion during the Consumer Talk feature:

For this edition of Consumer Talk, Jerome Brink was standing in for resident consumer expert Wendy Knowler.

Got a consumer case you need help resolving?

Email: consumer@knowler.co.za, put Cape Talk in the subject line, followed by the issue e.g. cellphone contract dispute.


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Read More

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