Sugar tax woes: Association wants no increases for ‘at least three years’

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Sugar tax has resulted in R8 billion in revenue loss. Photo: iStock

Sugar industry players have taken the issue of sugar tax to Parliament as thousands of livelihoods continue to hang in the balance.

Small-scale farmers, workers and sugar industry representatives, through the Taking Parliament to the People (TPTTP) programme, this week took their concerns directly to members of Parliament (MPs) and ministers.

MPs ‘recognise’ concerns

TPTTP, an initiative by the National Council of Provinces, allows citizens to directly interact with ministers and MPs.

Those invested in the sugar industry addressed the challenges they face in the agricultural sector, especially along the KwaZulu-Natal south coast.

Sugar Association of South Africa (Sasa) executive director Trix Trikam explained that roleplayers were seeking a “just and fair transition” regarding sugar tax, also known as the Health Promotion Levy (HPL).

“Our main request is that there should be no sugar tax increases for at least three years, and there should be no lowering of the current threshold while we pursue diversification opportunities – through the master plan process – to ensure the sustainability of the industry,” Trikam said in a statement.

“We do not seek direct bailouts. In line with the approach being followed in other sectors nationally, we seek an opportunity to accomplish a just and fair transition in the sugar sector.”

Sugar tax impacting industry

He said the industry has been severely impacted by the implementation of the HPL in 2018.

The industry has lost more than R8 billion in revenue, almost 10 000 jobs have been lost, and two mills have had to close.

Trikam said the HPL was “exacerbating the already dire financial state of the sector”.

Through the TPTTP, Trikam said the “serious issues” facing the industry were acknowledged by Trade, Industry and Competition deputy minister Fikile Majola.

He said Majola agreed with views expressed “that the HPL has had a deleterious impact on the industry since its introduction in April 2018”.

“We are further encouraged by his undertaking that he would engage with National Treasury and Department of Health on the matter.”

Tongaat Hulett business rescue

Sugarcane growers are currently under severe strain after Tongaat Hulett Limited (THL) elected to go into voluntary business rescue last month, putting more than 14 000 jobs on the line.

THL said two of its operations would be placed under business rescue.

The company has in recent years been rocked by allegations of mismanagement and financial misstatements, and currently has a debt burden of R6.3 billion.

Tongaat said its debt levels remained well in excess of what could be serviced and delays in its recapitalisation had worsened the situation.

THL and business rescue practitioners earlier this month missed a deadline to pay growers for sugarcane delivered to Felixton, Amatikulu and Maidstone mills in KwaZulu-Natal in September. The amount owed to growers amounts to millions.

SA Canegrowers chairperson Andrew Russell said this included around 4 300 growers, who delivered almost 600 000 tonnes of sugarcane to various THL mills last month.

They were due to be paid in excess of R400 million by the end of October.

The Citizen