Story by Owen Mandovha, Business Reporter
The sugar tax introduced in the 2024 national budget is topping industry discussions ahead of the mid-term budget review set for presentation this Thursday.
Government has raised over US$8 million in six months since the introduction of the sugar tax in the 2024 national budget to deter the consumption of sugary beverages responsible for causing obesity and diabetes, with the revenue going towards fighting these ailments.
However, ahead of mid-term budget review set for Thursday, a leading beverages manufacturer highlighted its sales have declined by 30 percent due to price increases, hence calls for the refinement of the policy measure to ensure that industry remains sustainably afloat.
“There is definitely nothing wrong with the introduction of the new tax because that is industry norm worldwide. In our case, sales have gone down by 30 percent as prices have gone up. But we have also noted that cheap imports are making their way into the market and we are asking for Treasury to have a relook at the policy to vary it downwards so that our industry remains afloat,” said Schweppes Zimbabwe’s general manager, Mr Demos Mbauya.
Newly elected president of the Zimbabwe National Chamber of Commerce, Mr Tinashe Karoro acknowledged the lasting positive of the new tax on national health status but underscored the need to consider industry concerns.
“We note concerns raised by the industry regarding the sugar tax. It is called a sin tax and aimed to manage diabetes and other diseases. The resultant price increase obviously impact negativity on sales which anyway is the aim of the tax but in our case, we are asking that Treasury listens to the issues raised by manufacturers so that it is a win- win situation,” he said.
Research shows that a raise in tax by 20 percent will trigger a corresponding reduction in consumption, hence lessening the burden on government’s health care services to treat the resulting ailments.
