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Sugar industry regrets increase in sugar tax – SABC News

The KwaZulu-Natal sugar cane industry says the Treasury’s decision to raise the sugar tax – formally known as the health promotion levy – is a blow to smallholder farmers.

In his budget speech, Finance Minister Enoch Godongwana announced – that the mark-up will increase by 4 points-five percent.

The industry says that since the tax was introduced in April 2018, sugar cane growers have lost revenue of approximately 1.2 billion Romanians over a period of time.

In South Africa, there are about 22,000 farmers in the sugar sector and about 21,000 of them are small farmers.

The sugar cane industry produces an average of 20 million tonnes of harvest from 14 storage areas in KwaZulu-Natal and Mpumalanga.

The industry says that the introduction of the health promotion tax (HPL), also known as the sugar tax, in 2018 had a devastating effect on the demand for sugar.

It is said that it has reduced the market demand for local sugar by about 20 percent and forced small farmers to quit the industry.

Stakeholders hoped that the industry would be excluded from the sugar tax increase this year. They cite ongoing talks with the government on a master plan for the sugar cane value chain, which includes an authorization for changes in product tax policy as a reason.

The chairman of the South African Sugar Association, Sindi Mabaso-Koyana, says that the announcement of an increase in the sugar tax to 4.5 was a shock.

The executive director of the South African Farmers Development Association, Thandokwakhe Sibiya, says the increase will have a detrimental effect on the industry of those already struggling. Sibiya says they will lose customers and be forced to shut down.

Heilbrigðari products

However, some nutritionists believe that as there is a growing number of people in South Africa with diabetes and obesity, the sugar tax will force companies to produce much healthier products with less sugar. Dr. Laurecia Govender from the Department of Dietetics and Nutrition at the University of KwaZulu-Natal.

“I think it will encourage our consumers to think about what they are buying and what it contains and this could reduce the amount of sweet sugar and drinks and hopefully it will mean less production of unhealthy drinks. Companies will now begin to change the composition of their products to make it healthier and healthier for the consumer.

At the same time, despite the disappointing rise in the sugar tax, the sugar industry says they are hopeful that continued communication with the government will help them find a suitable solution for all parties.

Finance Minister Enoch Godongwana delivers the 2022 budget speech

Sugar industry regrets increase in sugar tax – SABC News

Source link Sugar industry regrets increase in sugar tax – SABC News

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