Tobacco case provides lessons for potential sugar tax
I BEGAN last week chairing a panel discussion on the proposed sugar tax and ended it with an interview with British American Tobacco’s (BAT’s) new South African CEO.The comparisons and contrasts between the two "sin tax" products raise intriguing questions about the best instruments to tackle the health hazards they cause, as well as about the unanticipated consequences that can result if governments get it wrong.The tax that SA’s government proposes is not strictly a sugar tax, but a tax on sugar-sweetened beverages, which would add about 20% to the price of a can of Coca-Cola, making SA’s sugar tax the world’s highest.Coincidentally, the new sugar tax would raise about the same in revenue for the state, at R4bn-R5bn annually, as the illicit tobacco trade is estimated to lose to the state each year.Listening to one packaging industry executive who attended the panel discussion at Wits Business School, I wondered if a bunch of Coca-Cola smugglers, or illicit Fanta manufacturers migh...
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