SA sugar industry hopeful tax does not increase

Cold drinks in an aisle
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The South African sugar industry is crossing its fingers that Finance Minister, Tito Mboweni, does not increase the sugar tax, officially called the Sugary Beverage Levy, when he delivers his first budget speech on Wednesday.

The sugar tax came into effect in April last year.

The industry claims sugar tax is costing the industry about R1 billion a year.

South African Sugar Association chairperson, Hans Hackmann, says if the sugar tax was to go up, it would collapse the sugar industry.

“I think the biggest concern we have about the budget speech is that the Minister does not announce an increase in the sugar tax on the sugary soft drinks. I hope he does not also bring other products into the sugar tax bracket whereby that tax will be applicable to other manufactures that use sugar in making their products for example sweets and chocolates. That will be a disaster for our industry.”

“I think the impact of the sugar tax has been a loss of our domestic demand for sugar and I estimate that at about 200 000 tonnes per annum and the consequence for that is that this industry has to then export that 200 000 tonnes on to the world market at dumped sugar prices which results in a major loss of R1-billion of revenue per annum.”

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