THE SA Canegrowers’ Association says the 12-month delay in the implementation of the planned increase of the Health Promotion Levy (HPL) or sugar tax, is a welcome reprieve for the industry and especially small-scale growers.
In the 2022 Budget, Finance Minister Enoch Godongwana announced an increase in the health promotion levy of 4.5 percent to 2.31 cents per gram of sugar for sugary beverages with more than 4 grams of sugar per 100 ml. The increase was to be effective from April 1.
The minister also announced that consultations will be initiated to consider lowering the 4g threshold and extending the levy to fruit juices.
In a statement on Friday, National Treasury said to allow for the consultation process, it is proposed that the effective date of the increase be postponed to April 1 2023.
SA Canegrowers chief executive Thomas Funke said the delay is a welcome reprieve for South Africa’s growers, especially small-scale growers.
“In the first of year of its implementation alone, the sugar tax cost South Africa more than 16 000 jobs and R2,05 billion. This is despite government failing to produce any evidence to date that the tax has had any impact on bringing down obesity levels in the country, since it was introduced in 2018,” Funke said.
Modelling commissioned by SA Canegrowers with the Bureau for Food and Agricultural Policy (BFAP) showed that maintaining the sugar tax at the current level will still cost the industry a further 15 984 seasonal and permanent jobs and will be a major contributing factor towards a decline of 46 600 hectares of area under cane over the next ten years, Funke added.
“While (the) announcement provides some short-term relief to growers, it is critical that government focuses on assessing the long-term implications of keeping the tax in place. SA Canegrowers will therefore continue to engage government in this regard and will continue calling for further research into the impact of the tax on obesity levels as well as on jobs and revenue from 2018 to date,” he said.