A research report submitted to the Faculty of Commerce, Law and Management in partial fulfilment of the requirements for the Degree of Master of Commerce (Specialising in Taxation) / Obesity and overweight caused by overconsumption of sugar-sweetened beverages (‘SSBs’) are a problem in South Africa, as in most countries. It was for this reason that the Minister of Finance announced in the February 2016 Budget a decision to introduce a tax on SSBs with effect from 1 April 2017 to help reduce excessive sugar intake and tackle non-communicable diseases. Previously, South Africa had introduced similar legislation but abolished it in April 2002 after a nine-year period (BDO, 2012.) In order to determine the impact of the sugar tax in South Africa, the sugar tax was compared to similar taxes implemented in other tax jurisdictions, namely, the United States of America, the United Kingdom, Mexico and Denmark, and also to other similar taxes levied in South Africa. The question which the research addressed is whether a sugar tax could be used as a tool to decrease the rising rate of obesity in South Africa and therefore to improve the general health of South Africans (effective tax). The tax on SSBs may have its shortcomings but, depending upon the administrative and support structures put in place to deal with it, it will be an effective tax. In other words, the introduction of a sugar tax should reduce overweight and obesity. / GR2018

A Research Report Submitted to the Faculty of Commerce, Law and Management in Partial Fulfilment of the Requirements for the Degree of Master of Commerce (Specialising in Taxation) / In the 2016 Budget Speech, the then Minister of Finance, Pravin Gordhan, announced a decision to introduce a Health Promotion Levy (‘sugar tax’) on sugar-sweetened beverages (‘SSBs’). Sugar tax came into effect on 1 April 2018 in South Africa. In its Policy Paper released by the National Treasury in July 2016, titled “Taxation of Sugar Sweetened Beverages” (‘Policy Paper’), the National Treasury outlined the proposed sugar tax. It argued that the primary objective of the introduction of sugar tax was to reduce excessive sugar intake and curb the growing problem of obesity. Obesity and other non-communicable diseases (‘NCDs’) have significantly escalated over the past 30 years and has become a growing concern in South Africa. This has resulted in South Africa being ranked the most obese country in sub-Saharan Africa. The impact of SSBs on obesity and other NCDs has received widespread attention on the international stage and by the World Health Organisation (‘WHO’). This is evident from the fact that South Africa is not the first country in recent years to introduce a form of sugar tax which has been gaining traction as popular intervention to combat the growing concern of NCDs. The argument arises as to whether the tax is actually intended to meet its desired health benefits or simply increase revenue for the fiscus. This research will examine whether the implementation of sugar tax will contribute to its intended health objectives envisaged. In order to achieve this, a study will need to be undertaken with countries which have successfully introduced sugar tax including, Mexico, Norway, Denmark, the United Arab Emirates, Chile and United Kingdom. Lastly, this study will also explore the success of the implementation of sugar tax and the impact it has had on the fiscus of these countries. / NG (2020)