Sugar tax: a government policy without any evidence - SA Canegrowers

If the Minister of Finance, Enoch Gondongwana, decides to propose an increase in the sugar tax in the medium-term budget due to government’s search for additional income sources for the state, the result would be self-defeating.

- ANDREW RUSSELL

The sugar tax has been shown to destroy jobs, so a hunt for more revenue could well come at the expense of rural livelihoods and reduced state revenue. An increased tax could force many cane growers to go out of business.

Godongwana warned in May that the 2026 budget will require “new tax measures, aimed at raising R20 billion”.

Increasing the Health Promotion Levy (HPL), introduced in 2018 and sold as a tool to fight obesity, would be a grave mistake. After seven years, there is still no credible, independent evidence that the sugar tax has reduced sugar intake, improved diets, or curbed obesity.

What it has done is pile yet another tax and cost onto overstretched households, as well as threaten thousands of jobs ina sector that sustains entire rural economies.

The rationale for the HPL is seemingly based on international data and only a single local modelling study, essentially a projection of how consumption might change under the tax, rather than on extensive real-world, empirical data on South African habits.

The followup study on the tax’s effectiveness, published by the very same SAMRC/Wits Centre for Health Economics and Decision Science Research Unit (PRICELESS SA) academics who pushed for the tax, suffers from an obvious conflict of interest.