Unions welcome deferred sugar tax

Published Sep 7, 2017


JOHANNESBURG - Labour federations have called on the National Treasury to revisit submissions and engage meaningfully on the contentious sugar tax now that its implementation has been deferred.

This after the Treasury deputy director-general, Ismail Momoniat, announced on Tuesday that implementation of the so-called sugar tax would be delayed until April 2018. “We hope that during this postponement period they will attend to some of the submissions regarding the issue of jobs,” said Cosatu spokesperson Sizwe Pamla.

The Treasury had proposed a 20% tax on sugar-sweetened beverages, which was supposed to be implemented in April this year. It was aimed at curbing, among citizenry, obesity, diabetes and heart diseases.

But industry body, the Beverage Association of SA (BevSA), rallied against the proposed tax, saying if implemented, it would cost between 62000 and 72000 jobs and slash the gross domestic product by R14billion. “We understand the health risks that come with too much sugar consumption, but you can’t regulate human behaviour through legislation, especially if that legislation is going to cost people their livelihoods such as jobs,” Pamla said yesterday.

He said the sugar industry had lost 25000 jobs since 2000 due to cheap imports from countries such as Brazil. A further 15000 employments would be at stake if the proposed legislation was implemented as is.

“The government must tread very carefully. We hope that the postponement will push them to revisit some of the submissions and ensure that jobs are protected,” added Pamla. Momoniat said it was incorrect to say that the tax implementation had been deferred. “It’s not really a postponement. We are taking into account what people said in Nedlac (National Economic Development and Labour Council) (the implementation) is all dependent on the parliamentary process,” he said.

Dr Neva Makgetla, a senior economist at research organisation Trade and Industrial Policy Strategies, said if the tax was “adjusted” in a way that would not affect sugar producers “then it’s fine”. She also called on the government to cushion workers who could lose their jobs as a result of the legislation. Fedusa general secretary Dennis George said that the postponement should be used to establish a “proper dialogue on this matter so that we can scrutinise its impact on the economy”.

His counterpart from Nactu, Narius Moloto, agreed saying: “We should now engage in consultation with everybody and every stakeholder. The deferment allows us enough time to reach an agreement.” Saftu deputy general secretary Moleko Phakedi said: “This postponement should give rise to meaningful consultation with affected partners. The consultation should strike a balance between (promotion of) good health and job creation. The tax shouldn’t attain good health at the expense of jobs in the sector.”

Phakedi said the consultations should be inclusive and bemoaned the fact that their affiliate, Food and Allied Workers’ Union, was left out of the Nedlac discussions.

Despite repeated attempts BevSA couldn’t immediately be reached for comment and they had not responded to questions e-mailed to them at the time of going to print.


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