While consumption taxes are charged on the consumption of
goods and services and are generally imposed at the time of the transaction,
some businesses have gone overboard to disproportionately apply these taxes
beyond their intended purpose, sparking an outcry from consumers.
Examples include the recent obscene retail price increases
of soft drinks, alcoholic beverages, and a range of value-added dilute juices.
Others have gone to the extent of wrongly applying the tax on raw sugar.
In a statement yesterday, Finance, Economic Development and
Investment Promotion Minister, Professor Mthuli Ncube, said the application of
the sugar tax, in particular, has been misconstrued by businesses, and
expressed the Government’s disdain for the recent price increases purportedly
attributed to it.
The Government has already made a commitment to initially
ring-fence the revenue generated from the Beverages Sugar Content Tax for
therapy and procurement of cancer equipment for cancer diagnosis.
As a sign of such commitment, Prof Ncube, said Treasury
will soon be commissioning the machines purchased therefrom, and that
subsequent procurements will be advised accordingly.
Notwithstanding the above positives, he said the Government
was disturbed by the unjustifiable increase of prices for some beverages, which
is unreasonably attributed to the impact of the Beverages Sugar Content Tax.
“Such behaviour by the responsible manufacturers,
wholesalers, and retailers is a dear demonstration of incorrect interpretation
and, in some cases, profiteering.
“Government has, at its disposal, the prices charged by
such operators prior to the introduction of the lax, the maximum impact of the
Beverage Sugar Content Tax on the beverages in question and the expected prices
thereof,” said Prof Ncube.
“The Beverages Sugar Content Tax has been misconstrued as a
levy on sugar, when it is applied differently. The tax is, rather, applied on
the sugar content in beverages (drinks) specified in current legislation,” the
minister explained.
“Government wishes to categorically state that the tax does
not apply to sugar in general, hence, should not be misinterpreted as affecting
ordinary consumption. Producers of sugar, are, thus, not affected.”
Specifically, Prof Ncube clarified that the sugar tax is
applied to the “added sugar” in specified beverages, excluding natural sugar,
to encourage responsible consumption of sugar contained therein.
“It is scientifically proven that excessive consumption of
added sugar in beverages is linked to increased risk of non-communicable
diseases,” he said.
“The revision of the tax to 0090.001 per gram is dear
testimony of the commitment by the Government to carefully consider and adopt
constructive input from relevant stakeholders.
“Government is also aware that some producers cannot
immediately reconfigure their production processes, whilst there is a
commitment to reduce the sugar content by other manufacturers.”
On the other hand, he urged consumers to also make the
conscious choice to consume responsibly given the negative impact of excessive
consumption of sugar on their health status.
“Government, in observance of the principles of
transparency and accountability, takes this opportunity to enlighten the
general public on the broad tax policy considerations that have traditionally
guided the development of the taxation system, in particular, consumption-based
taxes,” said Prof Ncube.
He said it was disheartening that some businesses tend to
frustrate progress at a time when the implementation of the National
Development Strategy (NDS1) demands the recognition and adoption of bold and
transformative measures to underpin the drive towards the attainment of our
Vision 2030.
One of these measures includes the introduction of the
Beverages Sugar Content Tax aimed at addressing quality of life and health
matters through mobilising revenue that would be channelled towards such
causes, he added.
“Government has recently noted with concern, the imposing
nature of the input from some stakeholders on recently introduced tax measures,
notwithstanding the distinct role between stakeholders and policymakers,” said
Prof Ncube.
The minister said the targeted tax instruments were
critical across the globe and may be used to influence or re-direct such
consumption, especially, where consumption is deemed or scientifically proven
to impose negative externalities to society.
He further noted that the development and refinement of tax
policy measures has always been a result of a consultative process involving
business, consumer organisations, civil society, academia, Government agencies,
and the general public, among others.
“Such consultations are in view of the fundamental roles of
stakeholders to exercise the Constitutional right to influence public policy in
a responsible manner, with a view to develop this great nation,” said Prof
Ncube.
“Government will continue to consult, as wide as possible,
with relevant stakeholders, with a view to ensure enactment of evidence-based
policies.”
He also reiterated the Government’s commitment to the implementation of measures targeted at the timely realisation of the NDS1 objectives, being conscious of President Mnangagwa’s mantra: “Nyika inovakwa nevene vayo/Ilizwe lakhiwa ngabanikazi balo” Herald
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