Stop sugar tax before it kills the industry, pleads SA Canegrowers

The South African Cane Growers Association (SA Canegrowers) has pleaded with government to scrap the health promotion levy, commonly known as the sugar tax. 

In a statement compiled ahead of Thursday’s Medium-Term Budget Policy Statement (MTBPS), the organisation said Finance Minister Enoch Godongwana’s speech comes just days before the one-year anniversary of the sugar industry value-chain masterplan. 

The plan, developed by government, industry stakeholders, retailers and social partners, aims to tackle the challenges facing the sector, while ensuring its long-term sustainability and survival. 

The sugar tax, however, threatens to devastate the industry, both in terms of revenue and employment, SA Canegrowers warned. 

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Sugar tax complications

The sugar tax was introduced in 2018, with the aim of reducing obesity in South Africa. But according to SA Canegrowers, “there is little to no evidence that the tax has achieved this goal”. 

Over the past year alone, half of South Africans have gained weight, according to a national survey commissioned by Pharma Dynamics. 69% of the 2,000 respondents now reportedly border on obesity. 

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The association said a study commissioned by the National Economic Development and Labour Council (Nedlac) in June this year found that sugar tax had caused 16,621 job losses, a R653 million decline in economic investment, and a R1.19 billion decline in the sugar industry’s contribution to gross domestic product. 

The sugar tax has also cost the country over R2 billion. 

“Given the lack of evidence for the effectiveness of the tax, and its destructive impact on employment in the sugar industry, SA Canegrowers calls on minister Godongwana to scrap the sugar tax while the Department of Health investigates the impact of the tax on obesity levels in South Africa over the past three years.

“With support from minister Godongwana, we can save the sector, protecting the one million livelihoods that depend on it, and ensuring the expansion of opportunities for future generations.”