South African Sugar Industry Applauds Extension of Sugar Tax Moratorium

The South African Sugar Association (SASA) has welcomed Finance Minister Enoch Godongwana’s recent announcement that the Health Promotion Levy (HPL)—popularly referred to as the sugar tax—will remain unchanged. This move effectively extends the existing moratorium on the levy, offering the struggling sugar industry much-needed relief and additional time to pursue its diversification strategy. 

“We are relieved that the sugar tax moratorium has been extended to allow us more time to robustly pursue identified product diversification opportunities such as bioethanol for fuel blending, sustainable aviation fuel, polylactic acid, and cogeneration,” said Advocate Fay Mukaddam, Chairperson of SASA. 

Support for Diversification and Economic Transformation

 The sugar industry, in collaboration with the government, is currently undertaking scoping and pre-feasibility studies for alternative products. These projects form part of the Reimagined Cane Industry Strategy, aimed at repositioning the industry away from sugar alone and toward a more sustainable sugarcane-based economy. 

Finance Minister Godongwana’s decision aligns with the broader industrial policy goals outlined by President Cyril Ramaphosa in his State of the Nation Address, where he emphasized localisation, diversification, digitisation, and decarbonisation as central to South Africa’s economic recovery and future growth. 

“We are truly grateful to the Minister for listening to our cries, for the rural livelihoods depended on his decision. We are now going to move with speed to ensure that diversification becomes a key pillar of Phase Two of the Sugarcane Value Chain Master Plan to 2030,” added Mukaddam. 

Industry Calls for a Balanced, Science-Based Approach to Public Health

 While acknowledging the serious public health challenge posed by non-communicable diseases (NCDs) such as obesity and diabetes, the industry warned against what it termed a “simplistic and punitive” approach to health promotion. 

“There continues to be no credible studies showing that the sugar tax has led to the intended decrease in obesity and diabetes,” said SASA in a statement. The association maintains that a holistic, science-based strategy, rather than a narrow focus on specific food items like sugar, is essential in crafting effective and lasting solutions. 

The industry is also awaiting the results of a government-led total dietary intake study, which is expected to offer a more comprehensive understanding of the dietary factors contributing to South Africa’s NCD burden. These findings, SASA hopes, will guide future policy in a way that is fair, effective, and evidence-based. 

Looking Ahead: Cane-Based Economy as a National Asset

 The decision to delay any increase or restructuring of the sugar tax gives the sector a crucial window to advance its transition from a sugar-focused to a cane-focused value chain. With government backing and a coordinated strategy through the Sugarcane Value Chain Master Plan, industry leaders remain optimistic that this transformation will not only revive rural economies but also position South Africa as a global innovator in sugarcane-based bioproducts.

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