As Finance Minister Tito Mboweni prepares to deliver his Budget Speech on February 24, industry association the South African Cane Growers Association has called for an immediate decrease to the health promotion levy (HPL), or sugar tax, stating that this will help in the recovery of the local sugar industry and safeguard the one-million livelihoods that depend on it.
The call for a decrease to the sugar tax is even more urgent in light of recent announcements that an additional R100-billion in revenue has accrued to the National Treasury, association chairperson Rex Talmage says.
“Our government, therefore, has room to manoeuvre to help save the 65 000 direct jobs that the local sugar industry supports. Many of these jobs are on the farms of our 21 581 small-scale growers, in deep rural areas where economic opportunities are increasingly scarce,” he points out.
The association has repeatedly called for a comprehensive review of the sugar tax to assess the impact that this tax has had on local industry.
Talmage cited a survey conducted in the first year of the sugar tax, which found that the sugar industry had lost in excess of 9 000 jobs in the cane growing sector alone.
Under the Sugar Industry Masterplan, signed in November 2020, the association and industry stakeholders, including government, agreed that the socioeconomic impact of the sugar tax would be reviewed. A socioeconomic impact assessment has been commissioned but is not yet finalised, he indicated.
“The sugar industry is facing severe economic headwinds that threaten its survival including the sugar tax, cheap sugar imports and significant increases in costs of production. Without a thorough socioeconomic impact report, and with the real threat of more job losses looming, the Minister should immediately decrease the sugar tax as part of government’s stated efforts to save jobs and grow our economy,” Talmage emphasised.
He said it was crucial that Mboweni alleviate the mounting pressures on the sugar industry to power its continued recovery.
Talmage posited that this would represent concrete action on the part of government to support President Cyril Ramaphosa’s call during his State of the Nation Address for all South Africans to buy local and support the local sugar industry.