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Sugar tax hike breaches social compact, says Safda

The South African Farmers Development Association (Safda) said it is disappointed about the National Treasury’s decision to increase the Sugar Tax which was formally known as Health Promotion Levy (HPL). Photo: File

The South African Farmers Development Association (Safda) said it is disappointed about the National Treasury’s decision to increase the Sugar Tax which was formally known as Health Promotion Levy (HPL). Photo: File

Published Feb 25, 2022

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The South African Farmers Development Association (Safda) said it is disappointed about the National Treasury’s decision to increase the Sugar Tax which was formally known as Health Promotion Levy (HPL).

Safda said the tax increase is a slap in the face of small-scale farmers.

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“This increase seeks to undermine the Master Plan commitment by the government to put a moratorium on product tax policy changes,” said Safda.

According to the association, farmers are still dealing with the effects of 2021’s civil unrest, where farms were burned and harvested cane was rejected by sugar mills; farming equipment destroyed, and employment disrupted”.

Safda said growers lost millions of rand as a result of the unrest and the exorbitant fuel price increases further compounded this.

“Increasing the HPL to R2.31 cent per gram of sugar content that exceeds 4g per 100ml, will add salt to the wounds of our farmers. The introduction of the Health Promotion Levy (HPL) has had a devastating impact on sugar demand. ”

Safda said the HPL shrunk local market demand for sugar by 20 percent, which contributed to a marked reduction in industry-related jobs, with many small-scale farmers exiting the industry due to the significant reduction in revenue.

“As Safda, we see this act by National Treasury as a breach of the social compact by all participants and stakeholders in the sugar value chain, who support and signed the Sugar Master Plan,” the association said.

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Safda said, “The manufacturers will decrease the quantity of sugar in their products, which will lead to the decline of local demand for sugar and result in the increase in export sugar, which is a loss of revenue for the industry”.

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National TreasuryTax

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