Sugar drinks industry concerned by audits as SARS tightens compliance among producers

THE sugary beverages industry in South Africa is bracing itself for potential impacts as the South African Revenue Service (SARS) intensifies its focus on compliance among manufacturers.

- YOGASHEN PILLAY

SARS is now targeting businesses involved in the manufacturing of sugary beverages, with the revenue collector saying manufacturers of sugary beverages must be registered as commercial manufacturers if they use more than 500kg of sugar in their manufacturing process.

Professionals from Shepstone & Wylie Attorneys, Erasmus Theron and Herman de Jong, on Tuesday said the government was facing a daunting tax deficit following the vacuum left by an unchanged sugar tax amidst rampant fiscal constraints.

They said that with an ambitious revenue target of R2.006 trillion set for the 2025/2026 tax period, the government has turned towards indirect taxes—specifically excise duties, fuel levies, and carbon taxes—as keystones to bridge the financial gap caused by proposals to increase the Value-Added Tax (VAT) rate.