20 September 2016
MEDIA STATEMENT
SASA URGES TREASURY TO RECONSIDER TAX
The South African Sugar Association (SASA) has called on Treasury to reconsider its intention
to introduce tax on Sugar Sweetened Beverages (SSBs) by April next year.
The imposition of such a tax would have far-reaching ramifications for the industry and all
those dependent on it for their livelihood. In a country struggling with a high unemployment
rate of more than 25%, the introduction of the mooted tax is likely to compound unemployment
challenges in the two cane producing provinces of Mpumalanga and KZN. The hardest hit
would be the poor, emerging farmers and small businesses. The sugar industry is currently
grappling with external pressures such as drought, rising costs and global competitiveness.
The implementation of the mooted tax would therefore threaten the sustainability and survival
of the industry.
“Upstream and downstream industries will be impacted by adverse consequences right
through the value chain in terms of the ability to sustain business and employment. Suppliers
of agricultural and manufacturing inputs, contractors, transport, warehousing, packaging,
wholesale and retail, to name but some, would be (negatively) impacted. This is particularly
significant where historically disadvantaged business owners will be put at risk,” says Rolf
Lütge, SASA Chairman.
Treasury’s argument that the introduction of SSBs will result in reduced obesity levels in South
Africa is unlikely to bear fruit. There is no scientific evidence which has proven that the
imposition of a tax would automatically lead to reduced levels of obesity. “Based on scientific
evidence, the industry is not convinced that a tax on SSBs is an effective option to achieve
the desired reduction in obesity and non-communicable diseases,” says Lütge. The
association between the imposition of such a tax and a corresponding reduction in obesity is
not even claimed by the World Health Organisation or any other credible scientific authority.
It is also worth noting that in a number of developed countries such as the USA, UK and
Australia the per capita sugar consumption has been declining while obesity prevalence has
been rising. It is therefore clear that singling out an individual ingredient in a particular food
product is unlikely to be a solution to a complex phenomenon that requires a multi-disciplinary
approach to the promotion of healthy lifestyles, including healthy eating plans and patterns.
The sugar industry will continue to engage with government through Treasury and the
Department of Health regarding this matter of critical importance. In our submission to
Treasury, we have made the following recommendations:
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To defer the implementation of the tax until a full assessment of the causes of obesity
and NCDs in the South African context has been undertaken.
To conduct a socio-economic impact study to determine the extent of the negative
impact on the affected industries.
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To consider measures that will ensure that the objective of reducing obesity and NCDs
does not result in increased unemployment.
Should the implementation of the tax proceed, that the affected industries are granted
a longer period to adjust to the proposed tax.
SASA remains optimistic that the current consultative process will culminate in an
inclusive decision which will cater for the concerns and interests of all parties involved.
ISSUED BY SASA EXTERNAL AFFAIRS DIVISION
For media enquiries, please contact:
CEDRIC MBOYISA
SASA Communications and Media Manager
083-380-2847 or 031-508-7023