No increase in sugar tax for now

22nd February 2023 By: Marleny Arnoldi - Deputy Editor Online

No increase in sugar tax for now

Following heavy lobbying from industry bodies the Sugar Association of South Africa and South African Cane Crowers’ Association, government has decided to not increase the Health Promotion Levy (HPL), or sugar tax, in the 2023/24 and 2024/25 financial years.

This will allow the sugar industry more time to advance its diversification efforts, since an above-inflation increase to the HPL, or lowering of the threshold to which it becomes applicable, would result in a significant sugar demand decrease.

In making this decision, government took into account challenges stemming from greater regional competitiveness, and damage incurred from floods in April 2022 and civil unrest in July 2021.

Finance Minister Enoch Godongwana announced during the Budget speech on February 22 that government would soon publish a discussion paper on the levy for consultation on proposals to extend the levy to pure fruit juices and lower the 4 g threshold.