The sugary beverages levy is charged on sugar content above a threshold, not on the drink itself, which means two products of the same size can carry very different liabilities. Locally manufactured products are taxed at source and imported ones when they are cleared for home consumption, and only manufacturers above an annual sugar-volume threshold are required to license and pay.
For a small beverage producer the practical questions are whether you fall inside the threshold, how to register, and how a health levy of this kind changes what customers buy.
The levy is calculated on sugar above a threshold, not on volume
A charge per gram of sugar above a set level per 100ml means reformulation directly reduces the liability. That is the design intent: it is cheaper to reduce sugar than to pay the levy, and producers who reformulate early avoid both the cost and the disruption.
Only producers above the annual threshold must license
Commercial manufacturers whose total annual sugar content exceeds the stated limit are required to register and pay. A small producer below it is outside the scheme, but should track its own volumes, because growth across that line brings licensing obligations with it.
Imported and local products are taxed at different points
Local production is taxed at source and imports when cleared for home consumption. Anyone bringing in stock needs the levy built into landed cost calculations rather than discovered at customs, since it changes the comparison between importing and producing locally.
Health levies change demand across the supply chain
The industry argument against levies of this kind is that they put jobs and small-scale growers at risk. Whether or not you accept the forecast, businesses supplying sugar-intensive products should expect volumes to shift and should plan the product mix accordingly.
Register and file through the revenue service
Licensing, returns and payment for excise-type levies run through the systems of the South African Revenue Service, either electronically or at customs and excise branches. Registration opens ahead of collection, and leaving it until the first return is due is the common error.
Frequently asked questions
What is the levy actually charged on?
Sugar content above a set level per 100ml, which means two drinks of the same size can carry very different amounts.
Does every beverage producer have to pay?
No. Only commercial manufacturers whose total annual sugar content exceeds the stated threshold must license and pay.
When are imported products taxed?
When they are cleared for home consumption, which means the levy belongs in landed cost calculations from the start.
Can a producer reduce the liability?
Yes, by reformulating to lower sugar content, which is the stated purpose of charging on sugar rather than on volume.
Where does registration happen?
Through the revenue service, electronically or at customs and excise branches, with licensing opening before collection begins.
Further reading
Originally published in December 2017. Updated September 2026 to explain how the sugary beverages levy works for producers rather than reporting its introduction.
