SUGAR TAX INCREASE FREEZE DIVIDES SUGAR CANE AND HEALTH INDUSTRIES
While the SA Canegrowers Association has welcomed the decision by Finance Minister Enoch Godongwana not to enact any further increases in the Health Promotion Levy (or sugar tax) in his third instalment of the much-maligned budget, the Healthy Living Alliance (HEALA) has been left disappointed by the decision.
On Wednesday, Godongwana announced that the levy would remain unchanged. There was hope that the minister might increase the levy which was introduced in 2018 to reduce sugar consumption and combat related health issues.
A recent Stellenbosch University research study involving dietitians and other key role-players to establish the awareness and opinions of the HPL indicated that participants were positive about the HPL, although most of them agreed that the implementation of a sugar tax alone will not have a significant impact on obesity.
Obesity is regarded as a risk factor for non-communicable diseases (NCDs) such as heart disease. Many of them believe that the sugar tax should be increased to have a noticeable impact on SA consumers’ buying behaviour.
The World Health Organisation (WHO) and other international authorities recommend a 20% HPL. When the Department of Health considered a higher sugar tax in the past, there was opposition from beverage manufacturers and various sectors of society.
While Godongwana spared the sugar industry from lifting taxes, he has proposed hikes of 4% and 6% for tobacco and alcohol, respectively.
HEALA CEO, Nzama Mbalati decried the minister’s failure to live up to his previous promise saying the alliance is deeply disappointing that the Minister of Finance missed yet another opportunity to increase the Health Promotion Levy (HPL) to 20% — a vital measure to reduce sugar consumption and protect public health.
“Non-communicable diseases (NCDs) like diabetes, heart disease, and cancer are devastating families and communities across the country. Almost everyone knows someone — a relative, friend, or colleague — who is living with or has lost their life to one of these conditions.
This decision shows, once again, that the lives and health of South Africans are being placed below the profits of the sugar industry. Like the alcohol and tobacco industries, the sugar industry continues to ignore the harm their products cause to our people,” says Mbalati.
However, the sugar cane industry has welcomed the minister’s decision amid an alleged jobs bloodbath created by the introduction of the levy.
“Introduced in 2018, the sugar tax cost 16,000 jobs and R2 billion in revenue in the first year of implementation alone, according to independent research by Nedlac. Any increase would risk the livelihoods of growers and increase unemployment in many parts KwaZulu Natal and Mpumalanga, where there are few other job opportunities,” asserts, Higgins Mdluli of the SA Canegrowers Association.
Mdluli is of the view that sugar tax has been nothing but destructive for South Africa. While the Nedlac study demonstrated concrete proof of job losses, no evidence has been provided to show the tax has reduced obesity or improved the health of South Africans in any way.
“Ultimately, we believe that Treasury should scrap the tax, to help ensure that government drives job creation and economic growth, as per its commitments outlined in the Sugarcane Value Chain Master Plan 2030. This social compact between industry and government to revitalise the industry also has the potential to create new markets for sugarcane growers and kickstart new industrialisation projects in Mpumalanga and KwaZulu-Natal.
“Agricultural jobs are critically important to the stability of South Africa and to making sure that we reduce rural poverty and hunger. SA Canegrowers will continue to strive for an end to this job-killing tax, calling on the government to prioritise desperately needed economic growth and jobs instead,” adds Mdluli.
Picture courtesy of HEALA X account
