The Healthy Living Alliance (HEALA) wants South Africa’s sugar tax to be extended to include ultra-processed food and junk food. However, its proposal to The Treasury for its Medium-Term Budget has not gone down well with small business owners, who believe that it will put a dent in their pockets.
According to HEALA, the increased revenue for the state could contribute to higher child support and Covid-19 relief grants, and also contribute to a Basic Income Grant that is being considered by the government. Vutivi News spoke to SMME owners Tiyani Maluleke of Grub Worx and Puleng Sekekete of Dintle Chocolate, who both believe that an additional tax will be detrimental for small businesses.
“As a black manufacturer owning a small business production costs are quite high and to introduce this tax on ultra-processed food would be unfair for small business,” Sekekete said. “If someone wants to eat ultra-processed food, it’s their business. So, I don’t understand why I must pay more. If I don’t want to eat broccoli, I won’t eat it.” Sekekete believes that the problems facing the country have more to do with corruption than anything else. “If there could be money disappearing due to corruption, it means that we are not short of money. It is just not managed well,” she said.
“… if they say that you must tax us as SMMEs, we will suffer.”
Maluleke described the proposed tax as unnecessary. “It would be frustrating and would definitely leave a hole in my pocket because that 20% tax would contribute to making my business grow,” he said. “I get we need to eat healthily, but sometimes you want a sinful treat or something that is unhealthy.”
There were many other ways to get the money needed to increase the grants, Maluleke said. “I feel like they’re coming for our small businesses because there are countless ways of getting that money. We are already being taxed enough!” The group wants The Treasury to double the current health promotion levy to 20%, which it says will bring in an additional R2 billion in extra revenue. It says the additional revenue can also support nutrition-sensitive social support such as reduced tax, vouchers and subsidies for healthier foods.