South Africa: Sugar tax causes loss to the industry

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Sugar Tax introduced in South Africa in 2018 has led to the loss of 16,621 jobs and R653 million in investment, as per a report commissioned by the National Economic Development and Labour Council.

The report titled The Economic Impact of the Health Promotion Levy found that the losses led to the decline in the industry’s contribution to the GDP by R2.05 billion in 2019. The sugar industry’s Gross Value Added Contribution to the economy declined by R1.19 billion in the year.

Rex Talmage, Chairperson, SA Canegrowers Association said that the report has focused on only the first year after the implementation of the tax. The numbers would increase further if we consider the three years after the implementation of tax.”

“The report clearly says that the tax was the final nail in the coffin for the sugar industry, sugarcane growers and workers. The sugar industry was already reeling under financial stress and battling against severe droughts, increased production cost and competing with cheap sugar imports when the tax was imposed,” he further added.

Rex said, “Whether the tax reduced the obesity level of the country due to the imposition of the tax is not known. But it is evident that it has impacted the sugar sector a lot.”

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