Mthuli Ncube issues chilling warning over sugar tax-linked price hikes

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FINANCE Minister Mthuli Ncube has issued a stern warning to all traders effecting errant price hikes on sugary beverages arguing the gazetted tax thresholds do not justify such exorbitant changes.

The remarks come on the back of price adjustments which for instance have seen the price of a 2-litre Mazoe Orange Crush being sold at US$5,50 up from just US$3,00.

Some businesses have even misinterpreted the tax measures and have since moved to apply the tax on raw sugar which has now reached US$2,75 per 2kg packet up from US$2,00 as of December 31 2023.

Local businesses operating in Zimbabwe have always aligned their operations to unjustified and quite higher price adjustments whenever the base cost changes slightly.

But in a statement late Tuesday evening, the Treasury boss Ncube warned traders against the practice highlighting the price adjustments are not justified.

“The sugar tax has been misconstrued as a levy on sugar when it is applied differently. The tax is rather applied to the sugar content in Beverages specified in current legislation.

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

Specifically, said Ncube, the tax applied on the Added sugar in specified beverages excluding natural sugar to encourage responsible consumption of added sugar in beverages is linked to increased risks of non-communicable diseases.

He underscored that the revision of the tax to US$0,001 is a clear testimony of the commitment by the government to carefully consider and adopt constructive input from relevant stakeholders.

“Government is also aware that some producers cannot immediately reconfigure their production processes, whilst there is commitment to reduce the sugar content by other manufacturers. On the other hand, consumers have to also make the conscious choice to consume responsibly, in view of the negative impact of excessive consumption of sugar on their health,” he said.

Ncube said the Treasury has noted the unjustifiable increases of prices for some beverages which are unreasonably attributed to the impact of Sugar content Tax and described such behaviours by the manufacturers, retailers and wholesalers as a clear demonstration of the misinterpretation and in some cases profiteering.

“Government has at its disposal the prices charged by such operators before the introduction of the tax, the maximum impact of the Beverage Sugar Content Tax on the beverages in question and the expected prices thereof,” added Ncube. – NewsZim