Democratic Alliance trade and industry spokesman Wilmot James. Picture: ARNOLD PRONTO
Democratic Alliance trade and industry spokesman Wilmot James. Picture: ARNOLD PRONTO

THE DA will reject Finance Minister Pravin Gordhan’s proposed sugar tax if its purpose is "simply to raise more revenue under the fig leaf of a public health benefit", DA health spokesman Wilmot James said on Tuesday.

"(A) meaningful portion of this revenue should be ring-fenced for medical research," said James, adding that the tax’s purpose would be more defensible if it was clearly structured to fund medical research on obesity‚ diabetes‚ hypertension and social habits that increase body mass index (BMI).

The Treasury estimates that the sugar-sweetened beverages tax proposed in Gordhan’s budget speech in February, and gazetted for public feedback on July 8, could add about R11bn to the fiscus.

James said the DA has made submissions about the tax.

The party’s concern was job losses as a result of the tax, and of it posing a threat to the survival of small businesses and spaza shops‚ as revenue from sweetened drinks represents a large percentage of their revenue.

James said that rather than seeing the beverage industry as an enemy of change‚ the sugar tax should be structured to encourage product innovation.

"This would entail a graduated tax on manufacturers that would prompt companies to innovate and develop their product range to include drinks that fall under a proposed sugar threshold that attract no additional taxes‚" he said.

"Consideration should also be given to direct tax proceeds towards assisting schools to promote exercise and expanding the range of nutritious food and drink offerings at tuck shops."

TMG Digital