Finance minister hints at further tweak of sugar tax

MINISTER of Finance Fayval Williams last week toured the Pepsi-Cola Jamaica manufacturing facility in Kingston as part of ongoing consultation between the Government and the manufacturing sector on the new special consumption tax (SCT) on sweetened beverages.

Williams was joined on the tour by officials of the Ministry of Finance, Tax Administration Jamaica (TAJ), and the Jamaica Customs Agency.

Kathryn Silvera, president of the Jamaica Manufacturers and Exporters Association (JMEA), also took part in the tour.

The SCT on non-alcoholic sweetened beverages, set at $0.22 per gram of added sugar, took effect on May 1.

Walking the production lines from the syrup room to the distribution bays, Williams said the visit gave her team a clearer picture of the manufacturing operations.

“It helped us to see the magnitude of the production that happens here in Jamaica, and helped me to understand as well the magnitude of the export that happens from this location.

“We want Pepsi Jamaica to remain in Jamaica for as long as possible. They provide good jobs, they provide products that the population wants,” said Williams.

“We are going to go back with this new knowledge and look at what we are asking the industry to do and make the necessary changes so that we are not impacting their production, while at the same time ensuring that we collect the revenues on behalf of the Jamaican people,” Williams added.

In the meantime, Silvera said the tour was not a ceremonial exercise.

“It is not just about optics. The minister welcomed it and found it very informative,” Silvera said.

She credited the Beverage Tax Technical Working Group, which the JMEA convened shortly after the tax was announced, with persuading the Government to move from the originally proposed flat levy to the current per-gram structure.

“It signalled to us as manufacturers that they are willing to listen and that they are willing to compromise,” Silvera said.

Pepsi-Cola Jamaica produces about 900,000 cases of beverages a month at the Kingston plant, where it manufactures Pepsi, Pepsi Zero, Ocean Spray, and Gatorade for the local market. The company invested US$15 million in the facility in 2019 and a further US$22 million two years ago in new production lines.

Anecia Levy, transformation manager at Pepsi-Cola Jamaica, said the company has been reducing sugar across its product range for years.

“Pepsi has been reformulating for years now. With the introduction of Pepsi Zero a year and a half ago, that is a zero-sugar product SKU [stock keeping unit]. We currently have plans to reformulate multiple SKUs,” she said.

Levy said the industry accepts the broader fiscal context. “We’re not here to avoid or evade taxes. We understand that this is necessary, especially since the passing of Hurricane Melissa, and we want to do our part.”

The working group is expected to continue meeting with the Ministry of Finance, TAJ, Customs, and the Ministry of Health and Wellness in the weeks ahead.

Demar McLeod (left), manufacturing chief at Pepsi-Cola Jamaica, walks Finance Minister Fayval Williams through production operations during her tour of the company’s Kingston facility on Thursday. Also pictured are Juan Bolivar (second right), general manager of Celebration Brands Limited, and Alberto Ramirez, managing director of Pepsi-Cola Jamaica.