SA Canegrowers hails 12-month delay in sugar tax increase

SA Canegrowers says the announcement on Monday by Finance Minister Enoch Godongwana of a 12-month hold off in the sugar tax maximize supplies a welcome reprieve for South Africa’s smaller-scale growers.

The increase, which was due to arrive into outcome on Monday, was set to see the sugar tax surge from 2.21 to 2.31 cents per gram of sugar as announced by the minister in his Spending plan Speech in February.

The affiliation says the increase would have exacerbated the troubles the sector previously faces as a result of mounting input expenditures. Not only is the latest diesel fuel cost 40% over that of March 2021, it is expected to soar even increased, when the price tag of fertiliser has increased more than 160% when compared with last year.

“While [the] announcement provides some brief-expression reduction to growers, it is important that governing administration focuses on evaluating the very long-term implications of maintaining the tax in put,” the affiliation stated in a assertion.

“SA Canegrowers will thus go on to have interaction federal government in this regard and will keep on contacting for further more analysis into the effect of the tax on obesity ranges as effectively as on positions and income from 2018 to date.”

According to the affiliation, the very first calendar year of the sugar tax (2018) cost the nation additional than 16 000 positions and R2.05 billion, even with governing administration failing to develop any evidence (to day) that it has experienced any effects on minimizing weight problems.

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“Modelling commissioned by SA Canegrowers with the Bureau for Food and Agricultural Plan demonstrates that maintaining the sugar tax at the current level will nevertheless cost the field a additional 15 984 seasonal and everlasting positions and will be a big contributing issue in the direction of a decrease of 46 600 hectares of space less than cane more than the subsequent 10 many years,” SA Canegrowers additional.

“However, there would have been even further more career and revenue losses if the planned boost experienced long gone ahead currently (Monday).”

Palesa Mofokeng is a Moneyweb intern.