Sugar tax had cost the sugar industry around R1.5 billion, with the cane growing sector alone losing about 9 000 jobs in the first year. Photo: Supplied
Sugar tax had cost the sugar industry around R1.5 billion, with the cane growing sector alone losing about 9 000 jobs in the first year. Photo: Supplied

Minister Mboweni must consider bitter impact of sugar tax on jobs

By Sizwe Dlamini Time of article published Feb 26, 2020

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CAPE TOWN – Attractive as the sin taxes option may appear as a way of boosting government’s tax revenues, Fedusa on Tuesday cautioned Finance Minister Tito Mboweni to approach this issue with great care and sensitivity as onerous taxes may push some companies into serious financial hardships.

Fedusa said in a statement that This could ultimately force them to consider retrenching workers in order to survive commercially. “The sugar tax has already forced companies to issue a flurry of Section 189 retrenchment notices.”

The SA Canegrowers Association (SACG) on Tuesday urged the Finance Minister to urgently halt the sugar tax, which was crippling the sugar industry and causing thousands of job losses.

SACG chairperson Rex Talmage said since it was implemented in April 2018, the sugar tax had cost the sugar industry around R1.5 billion, with the cane growing sector alone losing about 9 000 jobs in the first year. 

This number is climbing, and thousands more have been lost in the sugar-milling and beverage industries. The impact of the sugar tax on poor, rural communities is absolutely devastating.

“We therefore reject the reckless and heartless call of lobby groups such as HEALA to increase the sugar tax further and expand it to other products. The people that run these organisations clearly do not understand the hardships that so many rural people face.

“We also challenge HEALA to produce evidence that the sugar tax has had a positive impact on obesity levels in the country. The truth is that there is no data available at this time to tell us whether the tax has achieved its objective of improving health,” said Talmage.

He said the government had acknowledged that thousands of jobs in the sugar industry were at risk, and was working with the SACG on a plan to ensure a more diversified and sustainable sugar industry. 

“The fact is that the sugar industry was already struggling as a result of weak protection against cheap imports, drought and plunging sugar prices. The sugar tax could very well be the final nail in the coffin for an industry that supports one million livelihoods.

“If Minister Mboweni is serious about ensuring inclusive economic growth and job creation, he will use his budget speech to halt the sugar tax until a full socio-economic assessment of its impact has been undertaken,” said Talmage.

SA Canegrowers remain committed to working with national government to ensure the sugar industry remains a long-term contributor to the South African economy and a job creator in rural areas.

BUSINESS REPORT

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