News / National
Mthuli Ncube issues chilling warning over sugar tax-linked price hikes
28 Feb 2024 at 01:31hrs | Views
Finance Minister Mthuli Ncube has issued a firm warning to traders engaging in unjustified price hikes on sugary beverages, arguing that the officially gazetted tax thresholds do not warrant such excessive changes.
This statement follows recent price adjustments, such as the 2-litre Mazoe Orange Crush now being sold at US$5.50, up from US$3.00. Additionally, some businesses have mistakenly applied the tax to raw sugar, raising its price to US$2.75 per 2kg packet from US$2.00 as of December 31, 2023.
Ncube emphasized that local businesses in Zimbabwe often inflate prices disproportionately whenever there is a slight change in the base cost. However, he clarified in a late Tuesday statement that the tax measures have been misinterpreted, particularly regarding its application to sugar.
"The sugar tax has been misunderstood as a levy on sugar itself, whereas it specifically targets the sugar content in specified beverages as outlined in current legislation," Ncube explained.
He further stressed that the tax is aimed at added sugar in specified beverages to promote responsible consumption and mitigate the risks of non-communicable diseases associated with excessive sugar intake.
Ncube highlighted the government's commitment to considering input from stakeholders, as evidenced by the revision of the tax to US$0.001. He acknowledged that some producers may need time to adjust their production processes, while urging consumers to make informed choices regarding sugar consumption's health implications.
The Treasury head expressed concern over unjustifiable price hikes on beverages, attributing them to misinterpretation and profiteering by manufacturers, retailers, and wholesalers. He noted that the government possesses data on pre-tax prices, the tax's maximum impact, and expected post-tax prices for affected beverages.
This statement follows recent price adjustments, such as the 2-litre Mazoe Orange Crush now being sold at US$5.50, up from US$3.00. Additionally, some businesses have mistakenly applied the tax to raw sugar, raising its price to US$2.75 per 2kg packet from US$2.00 as of December 31, 2023.
Ncube emphasized that local businesses in Zimbabwe often inflate prices disproportionately whenever there is a slight change in the base cost. However, he clarified in a late Tuesday statement that the tax measures have been misinterpreted, particularly regarding its application to sugar.
He further stressed that the tax is aimed at added sugar in specified beverages to promote responsible consumption and mitigate the risks of non-communicable diseases associated with excessive sugar intake.
Ncube highlighted the government's commitment to considering input from stakeholders, as evidenced by the revision of the tax to US$0.001. He acknowledged that some producers may need time to adjust their production processes, while urging consumers to make informed choices regarding sugar consumption's health implications.
The Treasury head expressed concern over unjustifiable price hikes on beverages, attributing them to misinterpretation and profiteering by manufacturers, retailers, and wholesalers. He noted that the government possesses data on pre-tax prices, the tax's maximum impact, and expected post-tax prices for affected beverages.
Source - newzimbabwe
