Government adopts new tax policies to guide consumer behavior

Government adopts new tax policies to guide consumer behavior

Nevanji Munyaradzi Chiondegwa

 

The government remains committed to the implementation of measures targeted at the timely realization of the NDS1 objectives and one of the measures is the introduction of the Beverages Sugar Content Tax aimed at addressing quality of life and health matters through mobilizing revenue that would be channeled towards such causes a government minister has said

 

This was said in a press statement by the Minister of Finance and Economic Development, Professor Mthuli Ncube while addressing the misconceptions surrounding what has come to be addressed as the ‘sugar tax’.

 

 

Prof Ncube said, “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. The implementation of the National Development Strategy 1 (NDS1) is premised on the recognition that bold and transformative measures are needed 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 mobilizing revenue that would be channeled towards such causes.”

 

 

He explained that consumption taxes are charged on the consumption of goods and services and are generally imposed at the time of the transaction and are used to influence or re-direct such consumption, especially, where consumption is deemed or scientifically proven to impose negative externalities on Society.

 

Development and refinement of tax policy measures have always been a result of a consultative process involving business, consumer organizations, civil society, academia, Government Agencies, and the general public, among others. Such consultations are given the fundamental roles of Stakeholders to exercise their Constitutional right to influence public policy responsibly, to develop this Great Nation.

 

Prof Ncube dispelled the notion that there is a levy on sugar saying, “The Beverages Sugar Content Tax has been misconstrued as a levy on sugar when it is applied differently. The tax is, rather, applied to the sugar content in beverages (drinks) specified in current legislation. The government wishes to categorically state that the tax does not apply to sugar in general and, hence, should not be misinterpreted as affecting ordinary consumption. Producers of sugar, are, thus, not affected.”

 

He said the tax is applied on 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 an increased risk of non-communicable diseases. The revision of the tax to US$ 0.001 per gram is a clear testimony of the commitment by the Government to carefully consider and adopt constructive input from relevant stakeholders.

 

He acknowledged that the government is aware that not all producers will be able to immediately reconfigure their production processes, but there is a commitment to reduce the sugar content by other manufacturers. Consumers are urged to make conscious choices to consume responsibly, given the negative impact of excessive consumption of sugar on their health status.

 

Professor Ncube said the revenue generated from the Beverages Sugar Content Tax will be ring-fenced for therapy and procurement of cancer equipment for cancer diagnosis. As a sign of such commitment, the Treasury will be commissioning the machines purchased therefrom, and subsequent procurements will be advised accordingly.

 

Prof Ncube said, “Notwithstanding the above, Treasury notes the unjustifiable increase of prices for some beverages which is unreasonably attributed to the impact of the Beverages Sugar Content Tax. Such behavior by the responsible manufacturers, wholesalers, and retailers is a clear demonstration of incorrect interpretation and, in some cases, profiteering.”

 

He warned that the government has, at its disposal, the prices charged by such operators before the introduction of the tax, the maximum impact of the Beverage Sugar Content Tax on the beverages in question, and the expected prices thereof. The government will continue to consult, as widely as possible, with relevant stakeholders, to ensure the enactment of evidence-based policies.