Industry mulls looming Sugar tax increase

An increase in the Health Promotion Levy (HPL), otherwise known as the sugar tax, will be ‘destructive’ to sugar cane growers and is ‘unjustifiable’ under the current economic climate.

Farmers are pleading with government to rather ‘prioritise measures to aid economic recovery and job retention’ ahead of the 2024 national budget set to be delivered by Finance Minister, Enoch Godongwana in Parliament tomorrow (Wednesday) at 2pm.

“The sugar industry is suffering under the combined effects of load-shedding, high input cost inflation, natural disasters, and deteriorating logistics infrastructure, much like other sectors of the economy,” said Chairperson of the SA Canegrowers Association, Andrew Russell.

“It also continues to face the challenge posed by the ongoing business rescue proceedings at Tongaat Hulett and Gledhow sugar mills.”

Russell said the increase in sugar tax will hit small-scale farmers hard.

“Independent research and modelling by the Bureau for Food and Agricultural Policy shows an expansion of the Health Promotion Levy would cost the sugar industry thousands of jobs and jeopardise businesses of nearly 3 000 small-scale growers.

“This would be over and above the thousands jobs and billions of rands in lost revenue already caused by the sugar tax since 2018 … and the costs ordinarily involved in cane growing including the input costs like fuel and fertiliser as well as increases in the national minimum wage.

“Few sugarcane growers can keep absorbing such extra costs and stay in business.”

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