‘Sugar tax will shave a billion rand off revenue, cost thousands of jobs’
THE sugar crop increased to 2.18million tons in the 2018/2019 season, from 2.16m tons in the comparative period last year as the industry geared up for a sugar tax.
The SA Sugar Association (Sasa) said prospects for the industry would be diluted by the 5.2percent sugar tax.
Sasa chairman Hans Hackman said tax would reduce revenue by R1billion a year.
“The industry is facing a number of serious challenges that threaten its sustainability,” Hackman said.
“The need for the industry to pursue diversification has become even more urgent.”
His concern follows an outcry in the industry, with cane growers claiming the tax had already cut its revenue by R1.3bn in the past year and could put up to 10000 jobs at risk.
Coca-cola has flagged that more than 1000 jobs would be affected by the sugar tax, which would also lead to above-inflation increases in input costs.
Hackman said the government should consider raising the import duty on dumped sugar to a dollarbased reference price formula.
“Past experience shows that when Parliament, government and the industry work together, more can be achieved.”
Food and Allied Workers Union (Fawu) general secretary Katishi Masemola said the union was concerned about job cuts.
He said the tax would affect at least 10000 jobs on plantations and in milling and refining.
“Coca-cola, which uses sugar, has proposed retrenching more than 1000 workers and they say this is a direct link to sugar tax. Other small manufacturers of beverages are also laying off workers,” he said.
“The government should place a moratorium on the sugar tax until we engage on obesity issues.”
The South African Canegrowers’ Association has called on Trade and Industry Minister Rob Davies to place a moratorium on the country’s sugar tax until its true impact could be established.
The association’s Rex Talmage said the government needed to move with speed on the socio-economic impact of the tax.
“There is no time to waste,” Talmage said. “We call on government to place a moratorium on the ill-conceived sugar tax until the true impact of it is known.”
However, the Healthy Living Alliance said it was alarmed by the political opportunism of the sugar industry in blaming its economic woes on the sugar tax.