SA Canegrowers says sugar tax will kill jobs and put livelihoods at risk

SA Canegrowers says the tax increase was decided on without any consultation with the sugar industry and other affected stakeholders

- Jyothi Laldas

The South African Cane Growers’ Association (SA Canegrowers) is calling on Minister of Finance Enoch Godongwana to reverse the decision to institute an increase in the Health Promotion Levy (HPL/sugar tax) in the Draft Rates and Monetary Amounts and Amendment of Revenue Laws Bill.

This followed Godongwana’s Medium-Term Budget-Policy Statement earlier this month. The main objective of the sugar tax, as stipulated by South Africa’s HPL policy, is to decrease incidences of diabetes and obesity. Government blamed the obesity crisis on the high consumption of “processed sugars”, and then began engaging with industry professionals on a proposed sugar tax, which later changed into the Health Promotion Levy on its eventual legislation in 2018.

The sugar tax equates to 2,1c/g of sugar above a 4g threshold per 100ml. This amounts to a levy of approximately 11% on the price of all sugary beverages with the aim of reducing consumers’ consumption of sugary beverages in South Africa.

It also required beverage producers to reformulate the product recipes and replace cane sugar with alternative or artificial sweeteners.

Since its implementation, as at June 2022, the sugar tax had contributed more than R10 billion in revenue directly to the National Treasury.