The sugar lobby, led by Sasa, has criticised the sugar tax, which it says cost the industry R1.2bn and threatened 300,000 jobs
20 February 2025 - 15:52
by Khulekani Magubane
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
MPs stand in front of a screen in a makeshift dome after finance minister Enoch Godongwana's 2025 budget speech was postponed in Cape Town on February 19. Picture: ESA ALEXANDER/REUTERS.
Finance minister Enoch Godongwana’s now-postponed budget proposed that an increase in the sugar tax in April be cancelled, to allow the sugar industry to adjust to the regional sugar market and align with the sugar master plan Vision 2030.
Godongwana was meant to table the 2025 budget in parliament on Wednesday afternoon, but the cabinet would not approve the budget due to a proposal to raise the VAT rate from 15% to 17%. The first budget speech under the government of national unity (GNU) will now take place on March 12.
The sugar industry has called for a five-year moratorium on the health promotion levy (HPL) or sugar tax.
The sugar lobby, led by the SA Sugar Association (Sasa), has decried the HPL, which it said cost the industry R1.2bn and threatened 300,000 jobs. However, the tax was probably here to stay as it provided the government with R10bn in revenue in 2023.
The Budget Review, which journalists and editors have seen, stated: “An inflationary increase in the health promotion levy was due to take effect from April 1 2025. Government proposes to cancel this increase to allow the sugar industry more time to restructure in response to regional competition.”
The review said it sought to mitigate the effects of its proposal for a two percentage-point VAT hike. The review also noted that gross value in the agriculture sector fell by 15.5% over the first two quarters of 2024 compared with the first two quarters of 2023.
“Production of summer crops such as maize, soybeans and sunflowers was affected by El Nino-linked heatwaves, while the livestock sector recovered after the avian influenza outbreak in 2023. A rebound is anticipated in 2025 as a weak Le Nina brings higher rainfall and lower temperatures and the livestock sector continues to recover.”
Godongwana also gave the industry some reprieve from an HPL hike in his 2023 budget, announcing the tax of 2.1c a gram of the sugar content exceeding 4g per 100ml would not increase for two fiscal years.
The industry employs 65,000 people permanently and another 217,000 indirectly, according to Sasa.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Enoch Godongwana’s postponed budget cancels sugar tax hikes
The sugar lobby, led by Sasa, has criticised the sugar tax, which it says cost the industry R1.2bn and threatened 300,000 jobs
Finance minister Enoch Godongwana’s now-postponed budget proposed that an increase in the sugar tax in April be cancelled, to allow the sugar industry to adjust to the regional sugar market and align with the sugar master plan Vision 2030.
Godongwana was meant to table the 2025 budget in parliament on Wednesday afternoon, but the cabinet would not approve the budget due to a proposal to raise the VAT rate from 15% to 17%. The first budget speech under the government of national unity (GNU) will now take place on March 12.
The sugar industry has called for a five-year moratorium on the health promotion levy (HPL) or sugar tax.
The sugar lobby, led by the SA Sugar Association (Sasa), has decried the HPL, which it said cost the industry R1.2bn and threatened 300,000 jobs. However, the tax was probably here to stay as it provided the government with R10bn in revenue in 2023.
The Budget Review, which journalists and editors have seen, stated: “An inflationary increase in the health promotion levy was due to take effect from April 1 2025. Government proposes to cancel this increase to allow the sugar industry more time to restructure in response to regional competition.”
The review said it sought to mitigate the effects of its proposal for a two percentage-point VAT hike. The review also noted that gross value in the agriculture sector fell by 15.5% over the first two quarters of 2024 compared with the first two quarters of 2023.
“Production of summer crops such as maize, soybeans and sunflowers was affected by El Nino-linked heatwaves, while the livestock sector recovered after the avian influenza outbreak in 2023. A rebound is anticipated in 2025 as a weak Le Nina brings higher rainfall and lower temperatures and the livestock sector continues to recover.”
Godongwana also gave the industry some reprieve from an HPL hike in his 2023 budget, announcing the tax of 2.1c a gram of the sugar content exceeding 4g per 100ml would not increase for two fiscal years.
The industry employs 65,000 people permanently and another 217,000 indirectly, according to Sasa.
TimesLIVE
VAT hike aimed to boost coffers as growth picks up
Treasury says it aimed to cushion the poor from VAT increase
DA rejected plan to lift VAT two weeks ago, says John Steenhuisen
Gross tax revenue revised down to R1.84-trillion in draft budget
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.