Cape Town — The postponement of Finance Minister Enoch Godongwana’s Budget Speech will allow the sugar industry to adjust to the regional sugar market and align itself with the sugar master plan Vision 2030.
The sugar industry, led by the South African Sugar Association (SASA) proposed that an increase in sugar taxes be cancelled to allow for the adjustments. The sugar industry called for a five-year postponement of the health promotion levy (HPL) or sugar tax, TimesLIVE reported.
SASA said the HPL has cost the industry more than R1 billion and threatened more than 300 000 jobs. The Budget Review stated that an inflationary increase in the HPL was set to take place on 1 April 2025 but the government proposed to cancel the increase to allow more time for the sugar industry to restructure in response to regional competition.
Godongwana had previously given the sugar industry reprieve from HPL in 2023 when he said 2.1 cents a gram of sugar content exceeding 4g per 100ml would not increase for two years.
Mhlaba emphasised a vision of sustainability for the sugar industry that can improve livelihoods and create jobs. He said their vision included economic resilience and a transformative journey towards a sugarcane-based value chain.
This strategic collaboration between government, industry and value chain partners aims to transform the sugar sector into a diversified and sustainable model, Mhlaba explained.
He understood that sugar tax was crucial for the government in terms of bringing in revenue and it would be difficult for the government to take that source of revenue away but he admitted it would be ideal for the industry.
“We need to be firm in the fact that increasing it would be extremely detrimental to the industry. Hence our call as an industry for a moratorium for the next five years,” he said.
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Compiled by Matthew Petersen
