IN February 2023, Finance Minister, Enoch Godongwana placed a two-year moratorium on an increase in the sugar tax, officially the Health Protection Levy (HPL), giving the industry time to diversify and adapt. With February 2025 fast approaching, arguments for and against an increase in the tax are getting louder.
Heala, a coalition that advocates for equitable access to affordable and nutritious food for all in South Africa is campaigning for the sugar tax to be increased to at least 20% on sugary drinks, including fruit juices, to “protect our children”.
In an open letter, sugar value chain partners, including the South African Sugar Association, South African Sugar Millers’ Association, South African Farmers Development Association, SA Canegrowers, the Consumer Goods Council of South Africa and the South African Sugar Converters Association have called for a further moratorium on the sugar tax to enable economic growth and sustainability through cohesive policies.
Posted by the SA Canegrowers Association on 28 October, the letter calls on the finance minister “to honour the commitment made publicly, in his 2023 budget announcing that consultations would be initiated with affected and interested parties as National Treasury considers adjustments to the HPL, including the proposed lowering of the 4g threshold and the extension of the levy to fruit juices.”
The sugar group says these consultations are essential for affected and interested parties to provide factual information and data on the potential unintended consequences of the HPL, which will help guide the National Treasury decision-making process.
“We are deeply concerned that the HPL led to the loss of 16,000 jobs in the first year of the tax alone, according to a study by Nedlac, and if increased, it would lead to the loss of further jobs including in impoverished rural cane growing provinces that need employment the most.
“The HPL was implemented in April 2018, as one of the measures by the Department of Health to address obesity and non-communicable diseases (NCDs) in South Africa. Since then, there has not been a single study conducted or provided to show if the tax has led to meaningful health outcomes such as reduced diabetes or obesity, or a healthier population,” the sugar group claims.
The letter further claims that the government has not followed through on its commitment to commission two evidence-based studies. “One was to measure the total dietary intake of the population to better understand the full array of causes of obesity and lifestyle diseases among South Africans and the other study aimed to measure the full socio-economic impact of the sugar tax.
The group says it has yet to see any credible evidence justifying an increase or extension of the tax.
They call on the minister to scrap the HPL, or at the barest minimum, extend the moratorium on any increases or broadening of the reach of the HPL until the promised inclusive consultations on the impact of the HPL are held with industry. “The parties will thereafter require adequate time to consider the implications of the consultations, if any, on the sugar value chain, the economy and the health of the nation,” the letter states.
