SA Canegrowers urges abolition of South Africa sugar tax

SA Canegrowers has urged the South African government to abolish the Health Promotion Levy (HPL), commonly known as the sugar tax, citing severe economic damage to the industry. The association has called on Finance Minister Enoch Godongwana to scrap the levy during the upcoming Medium-Term Budget Policy Statement scheduled for October 21, 2026.

Since the tax was introduced in April 2018 to combat obesity, the industry has faced significant setbacks. SA Canegrowers cited a study finding that 16,000 jobs were lost across sugarcane farming and milling by 2019. The association also noted that the levy contributed to the permanent closure of two mills in KwaZulu-Natal and a loss of 250,000 tonnes of sugar sales in its first year.

The industry is currently facing an 18% drop in sugarcane deliveries to mills compared to the previous season, alongside a 17% decline in the recoverable value extracted from cane. Additional pressures include competition from imported sugar and financial uncertainty surrounding Tongaat Hulett. The association further questioned the levy's purpose, noting that proceeds are directed to the National Revenue Fund rather than being specifically earmarked for public health programs.