The National Treasury has missed the 30-day legislative deadline to respond to a Promotion of Access to Information Act (PAIA) application submitted by industry organisation SA Canegrowers, which is seeking access to all information and data relied upon when introducing the Health Promotion Levy, also known as the sugar tax, as well as subsequent decisions to increase it.

The levy has had a devastating economic impact on the sugar industry over the past few years, with thousands of jobs being lost and billions of rands in revenue lost, states SA Canegrowers chairperson Andrew Russell.

However, while national government indicated that the levy was introduced to bring down obesity levels in the country, the government has failed to date to produce any data to support this argument or to show that the tax has had any impact in this regard, he highlighted.

Further, in recent months, sugar miller Tongaat Hulett has had its South African operations placed under business rescue, while SA Canegrowers data has shown that loadshedding is expected to cost the industry more than R700-million in 2022.

"With these headwinds facing the industry, and thousands of jobs on the line, maintaining the Health Promotion Levy is unjustifiable and unconscionable," he says.

"The PAIA request, submitted on December 14, specifically sought any health-related information relied upon in decision-making about the Health Promotion Levy, including any data and research relied upon demonstrating that the Health Promotion Levy has, in fact, reduced obesity levels - not sugar consumption - in South Africa since its implementation in April 2018.

"The PAIA also requested submissions, memoranda, summaries and other documents considered by Finance Minister Enoch Godongwana in deciding to increase the Health Promotion Levy; and submissions, memoranda, summaries and other documents considered by cabinet on the issue of the Health Promotion Levy."

Meanwhile, evidence of the destructive impact of the Health Promotion Levy has been submitted to Treasury since 2021 when a National Economic Development and Labour Council-commissioned study showed that the levy had cost the industry R2-billion and more than 16 000 jobs in its first year alone.

Further modelling completed by the Bureau for Food and Agricultural Policy demonstrated that merely maintaining the levy would kill a further 15 000 jobs and reduce the area under cane by 46 600 ha over the next ten years, SA Canegrowers notes.

"Despite this information being shared with Treasury, in his Budget Speech in February 2022, Godongwana announced an increase in the levy. The implementation of the increase was subsequently postponed to April 1, 2023, ostensibly to allow for further engagement with all relevant stakeholders.

"However, as the implementation date for the increase draws near, the industry has yet to have any engagement with government on the planned increased. As a result, industry stakeholders have had no opportunity to enquire into the reasoning or the justification for the increase.

"This is especially important since government has to date provided no data demonstrating the effectiveness of the levy in achieving its stated objective, which is to reduce obesity and the prevalence of obesity-related diseases in South Africa," Russell emphasises.

In the absence of any proof that the levy has been effective, and in light of the demonstrated economic destruction of the levy, SA Canegrowers calls on Godongwana not only to reverse the decision to increase the levy, but to scrap the levy entirely.

"This is a matter of survival for sugarcane growers, for industry value chain stakeholders and for the one-million South Africans who rely on the industry for their livelihoods," he says.