Sugar Crisis: an increase in the sugar tax will decimate the industry and kill 21,805 jobs
22 February 2022
In his maiden Budget Speech on Wednesday, 23 February 2022 Minister Godongwana must scrap the Health Promotion Levy (the “sugar tax”). Research has shown how much the sugar tax has already cost the country in terms of investment, contribution to Gross Domestic Product and, most importantly, jobs. South Africa cannot afford the sugar tax at its current level and any increase in the sugar tax would be catastrophic.
SA Canegrowers has previously drawn Treasury’s attention to the findings of the socio-economic assessment commissioned by NEDLAC which shows that the sugar tax cost South Africa more than 16,000 jobs and R2,05 billion in the first year of its implementation alone.
These findings are especially devastating when we consider that there has been no evidence that the sugar tax has been effective in achieving its primary objective, to reduce obesity levels in South Africa. Yet health activists have continued to call for an increase in the sugar tax instead of taking a holistic approach to health that takes into account all of the factors that contribute to obesity in South Africa. This scapegoating of one industry will have a heavy cost to the country and its workers.
SA Canegrowers recently commissioned the Bureau for Food and Agricultural Policy (BFAP) to conduct modelling on the future impact of the sugar tax under different scenarios. The study showed that if the sugar tax remains in place at the current level, it will be a major contributing factor towards a decline of 46, 600 hectares of area under cane over the next ten years. This is 13% of the current hectares under cane. South Africa already lost 14,6% of its area under cane between 2005 and 2015 but this decline had stabilised by 2016.