Tafadzwa Nyikadzino

Government has raised concerns over the rising prices of Beverages with high sugar content following the introduction of the Beverage Sugar Content Tax, saying the price hikes are unjustified.

The Minister of Finance, Economic Development and Investment Promotion,  Professor Mthuli Ncube said the price hikes are coming from a misunderstanding that the tax has an effect on sugar producers, when it only applies on the sugar content in beverages.

He said the tax aims at addressing the quality of life and health matters through mobilising revenue that will be channelled towards treating non-communicable disease that come from the consumption of such beverages.

“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.

“Government wishes to categorically state that the tax does not apply on the sugar in general, hence, should not be misinterpreted as affecting ordinary consumption. Producers of sugar, are, thus, not affected.

“Specifically, the tax is applied on the Added Sugar in specified beverages, excluding natural sugar, with a view 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,” Professor Ncube said.

He added that the government will ring-fence the revenue from the tax and use it to buy cancer diagnosis machines. Professor Ncube also said consultations between government and manufacturers will be conducted to review the price hikes of these beverages which he said are unjustified.

“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, Treasury will be commissioning the machines purchased therefrom, and subsequent procurements will be advised accordingly.

“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 behaviour by the responsible manufacturers, wholesalers and retailers is a clear 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 tax, the maximum impact of the Beverage Sugar Content Tax on the beverages in question and the expected prices thereof.

“Government will continue to consult, as wide as possible, with relevant stakeholders, with a view to ensure enactment of evidence-based policies,” he said.