SA sugar industry calls for sugar tax to be scrapped by next budget speech
2 min readSA Canegrowers has called on Finance minister Enoch Godongwana to scrap the Health Promotion Levy (HPL), commonly known as the sugar tax, arguing that it is adding to mounting financial pressure on South Africa’s sugar industry.
The organisation wants the levy removed through the upcoming medium-term budget policy statement (MTBPS), saying that its continued application threatens the viability of the sugar value chain, which supports more than one million livelihoods.
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SA Canegrowers chairman Higgins Mdluli says, “Our small- and large-scale growers are being hit from every side. Less cane is reaching the mills, and local sugar processed at the mills are being displaced from retail shelves by foreign sugar.”
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The HPL was introduced in April 2018. SA Canegrowers says the levy contributed to significant revenue and job losses, with a Nedlac-commissioned study finding that the sugarcane farming and milling industries had lost 16 000 jobs by 2019. The industry also lost 250 000 tons of sugar sales in the levy’s first year.
The sector is now facing further pressure, with sugarcane deliveries to mills down 18% this season compared with the previous season, while the recoverable value extracted from the cane has fallen 17%.
SA Canegrowers says weak tariff structures and enforcement have allowed foreign sugar into the country for more than two years, while Tongaat Hulett remains in business rescue.
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Mdluli says the levy also creates uncertainty for investment in diversification.
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“As long as the levy remains on the books, growers, millers, and investors cannot plan adequately for the future,” he says.
SA Canegrowers also questioned the levy’s continued justification, noting that its revenue is not ring-fenced for health promotion but flows into the National Revenue Fund.
The organisation says removing the levy would provide greater policy certainty for the sector and support longer-term investment.
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