SA Sugar Tax Brings “Catastrophic Loss” To The Industry

4 June 2021 – South Africa’s sugar tax has lost thousands of jobs and hundreds of millions of rands of investment within a year, according to a report commissioned by the National Council for Economic Development and Labour.

The tax, introduced in 2018, found that by 2019, 16,621 jobs had been lost and R653 million of investment had been lost, according to a report entitled.

The report further revealed that as a result of this tax, the industry’s contribution to the economy was reduced by R $ 1.19 billion through the gross value-added contribution of the sugar industry.

This loss further reduced the country’s total industry contribution to GDP by R2.05 billion in 2019.

The tax imposition also lost nearly 10% (9,154) of direct, indirect and induced employment. Sugarcane farmers were hit hard by taxes, with a contribution to the sector’s economy of R10.5 billion in 2017, about R. 217.7 million in 2019 and Rand 414.2 million two years after its introduction. It is reported that it was done.

Rex Talmage, chairman of the SA Canegrowers Association, said the report’s findings cover only the first year of tax introduction, and three years later, the numbers are undoubtedly much higher. ..

“The sugar tax was also enforced when the sugar industry was already overwhelmed by other severe headwinds such as drought, rising production costs and cheap sugar imports. With thousands of local sugar cane producers. There are farm workers, “Tarmage said in a statement.

He added that there was no evidence that taxes had achieved the goal of lowering the country’s obesity level, but instead created a “worst scenario” and an industry that had to deal with unproven health interventions.

Mr Talmage said he hopes the report will help the government respond to the industry’s call for tax abolition. He added that it is important not to impose a sugar tax on the success of the sugar cane value chain master plan and the recovery of the sector.

However, he praised the state’s establishment of the Sugar Cane Value Chain Master Plan Task Team on Product Tax Policy. The task team will consider the impact of sugar tax on the financial sustainability of rural communities, economies and industries in areas where sugar cane is grown. Source (News24)