Sasa urges government to rethink sugar tax

The South African Sugar Association (Sasa) has called on Treasury to reconsider its intention to introduce a tax on sugar-sweetened beverages by April next year.

Speaking at a press conference in Rosebank at 54 on Bath Hotel, Sasa chairperson, Rolf Lutge said the imposition of such a tax would have far-reaching ramifications for the industry and all those dependent on it for their livelihood. “Although we cannot quantify the number of jobs that will be affected as a result of the mooted tax, all we can convey is that there will certainly be job losses due to the drop in consumption.”

In a country struggling with a high unemployment rate of more than 25 per cent, Lutge said the introduction of the tax would further compound the unemployment challenges in the two cane producing provinces of Mpumalanga and KwaZulu Natal. “This will, for certain, spill over to other areas, especially through the value chain, and the hardest hit would be the poor, emerging farmers and small businesses,” he reiterated.

What makes matters worse, Lutge said, was the fact that the industry was currently grappling with external pressures such as the drought, rising costs and global competitiveness, and the implementation of a sugar tax would exacerbate the situation and threaten the sustainability and survival of the industry.

He went on to say that the sugar industry will continue to engage with government through the Treasury and the Department of Health in an effort to get the government to defer the implementation of the tax until a full assessment of the causes of obesity in the South African context has been undertaken. “We also call upon the government to conduct a socio-economic impact study to determine the extent of the negative impact this mooted tax would have on the affected industries, failing which,

“We also call upon the government to conduct a socio-economic impact study to determine the extent of the negative impact this mooted tax would have on the affected industries, failing which, government must grant the affected industries a longer period to adjust to the proposed tax,” Lutge said.

The introduction of the tax has attracted negative responses from various quarters, with an Alexandra business support group, Tshebedisano Support Network, also calling for a rethink on the taxation of sugar-sweetened beverages. They claimed this would severely affect the poor, especially the small businesses and spaza shops in the township, which are sole livelihoods of the poor in the impoverished township.