The existing and expanding tax bases has made it possible to provide some relief to the sugar industry in imposing a further increase in the health promotion levy – also known as the sugar tax.
SINCE the 2022 Medium-Term Budget Policy Statement (MTBPS), medium-term non-tax revenue estimates have been revised up by R4.5 billion, driven by higher departmental receipts partially offset by lower mineral and petroleum royalties.
Projections of National Revenue Fund receipts have been revised up by R3.1bn over the Medium-Term Expenditure Frameworks (MTEFs) period due to higher expected revaluation profits on foreign currency transactions.
Payments to the Southern African Customs Union have been revised up by R1.6bn per year in 2024/25 and 2025/26, compared with the 2022 MTBPS estimates, mainly due to better performance in customs duties.
Compared with the 2022 Budget estimates, main budget revenue is projected to improve by R192.9bn between 2023/24 and 2024/25. This significant increase in revenue collections and projections mainly reflects resilient personal incomes and corporate profitability, as well as revisions to major tax bases. This is according to National Treasury’s 2023 Budget Review.
The existing and expanding tax bases has made it possible to provide some relief to the sugar industry in imposing a further increase in the health promotion levy – also known as the sugar tax.
“Due to the difficult operating environment for the sugar industry from the impact of flooding and social unrest, the health promotion levy will remain unchanged for the following two fiscal years to enable the industry to diversify or restructure,” Finance Minister Enoch Godongwana said in his Budget Speech today.
Originally, National Treasury introduced the levy on sugary drinks with more than 4g/100ml of sugar. The rate is currently fixed at 2.1 cents per gram of the sugar content that exceeds 4g/100ml, ie the first 4g/100ml are levy-free. This followed a nominal increase in April, last year.
The tax is charged on non-alcoholic sugary beverages, except fruit juices, and practically works out to about 10% to 11% per litre of the sugary drink.
The government is also proposing an increase in excise duties on alcohol and tobacco of 4.9%, in line with expected inflation.
This means that the duty on:
∎ A 340ml can of beer increases by 10 cents.
∎ A 750ml bottle of wine goes up by 18 cents.
∎ A 750ml bottle of spirits is to increase by R3.90.
∎ A 23g cigar is going up by R5.47.
∎ And on a pack of 20 cigarettes, the duty rises by 98 cents.
With regard to illicit trade the SA Revenue Service (Sars) has over the past three years taken several steps to enhance its effectiveness in combating illicit trade, particularly in tobacco, Godongwana said.
Sars effected 2 316 seizures of illicit cigarettes and tobacco products valued at R598.8 million. A further R18bn in schedules and assessments have been raised targeting syndicated tobacco-related crimes.
“Furthermore, Sars has collected more than R1.2bn in revenue and handed over 92 cases for criminal proceedings with the National Prosecuting Authority of which two resulted in successful convictions relating to tobacco smuggling syndicates,” the minister said.
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