Latest news with #HealthPromotionLevy
IOL News
24-05-2025
- Business
- IOL News
Navigating your finances: Key takeaways from the 2025 Budget Speech
The recent 2025 Budget Speech brought with it some crucial announcements that will directly impact your household budget. Image: Steve Buissinne/Pixabay THE recent 2025 Budget Speech brought with it some crucial announcements that will directly impact your household budget. For starters, there is good news on the value-added tax (VAT) front: it will remain at 15%, after the reversal of the previously proposed increase. While this offers some relief, it also means the planned expansion of the zero-rated food basket, which would have cushioned lower-income households, will no longer proceed. Previously, the proposed new items included the edible offal of sheep, poultry and goats; specific cuts such as heads, feet, bones and tongues; as well as canned vegetables. However, the 21 items previously classified as zero-rated still remain in place, including brown bread, maize meal, rice and samp, to name a few. For those who enjoy alcoholic beverages, you should expect to pay approximately 6.8% more across most categories, including malt beer, wine, sparkling wine, ciders, alcoholic fruit beverages and spirits. Similarly, a 4.8% increase has been implemented for tobacco products, affecting cigarettes, vaping products (specifically HTP — heated tobacco product — sticks), cigarette tobacco, pipe tobacco and cigars. The sugar tax (officially known as the Health Promotion Levy) will remain unchanged for this financial year, despite an inflationary increase being due, to allow the sugar industry more time to restructure. However, citizens need to be prepared for a slight bump at the pumps. The general fuel levy is set to increase from 4 June 2025, marking the first such increase in three years. Specifically, petrol will go up by 16c per litre, and diesel by 15c per litre. This is an inflation-linked adjustment. On the social support side, there is continued commitment from the National Treasury. The old monthly age grant was increased by R120 to R2 310 in April 2025, with another R10 increase planned for October, bringing it to R2 320. Furthermore, the Covid-19 social relief of distress grant has been extended until the end of March 2026. Regarding municipal services, the budget allocates R610 per month for free basic services to 11.2 million poor households in 2025/26, covering essential needs like electricity and water. On this note, older persons are encouraged to go to their local municipalities to be registered for the indigent programme if they meet the qualifying criteria.
The Star
21-05-2025
- Business
- The Star
BUDGET: SA Canegrowers welcomes no increase in sugar tax
SA Canegrowers on Wendesday said that it welcomes the decision by Finance Minister Enoch Godongwana not to enact any further increases in the Health Promotion Levy (or sugar tax) in his Budget 3.0. "Introduced in 2018, the sugar tax cost 16 000 jobs and R2 billion in revenue in the first year of implementation alone, according to independent research by Nedlac. Any increase would risk the livelihoods of growers and increase unemployment in many parts KwaZulu Natal and Mpumalanga, where there are few other job opportunities," SA Canegrowers said. " The sugar tax has been nothing but destructive for South Africa. While the Nedlac study demonstrated concrete proof of job losses, no evidence has been provided to show the tax has reduced obesity or improved the health of South Africans in any way," it further stated. The association said it believes that Treasury should scrap the tax, to help ensure that government drives job creation and economic growth, as per its commitments outlined in the Sugarcane Value Chain Master Plan 2030. "This social compact between industry and government to revitalise the industry also has the potential to create new markets for sugarcane growers and kickstart new industrialisation projects in Mpumalanga and KwaZulu-Natal," Canegrowers said in a statement. "Agricultural jobs are critically important to the stability of South Africa and to making sure that we reduce rural poverty and hunger. SA Canegrowers will continue to strive for an end to this job-killing tax, calling on the government to prioritise desperately needed economic growth and jobs instead," it further said.
IOL News
21-05-2025
- Business
- IOL News
BUDGET: SA Canegrowers welcomes no increase in sugar tax
SA Canegrowers on Wendesday said that it welcomes the decision by Finance Minister Enoch Godongwana not to enact any further increases in the Health Promotion Levy (or sugar tax) in his Budget 3.0. "Introduced in 2018, the sugar tax cost 16 000 jobs and R2 billion in revenue in the first year of implementation alone, according to independent research by Nedlac. Any increase would risk the livelihoods of growers and increase unemployment in many parts KwaZulu Natal and Mpumalanga, where there are few other job opportunities," SA Canegrowers said. "The sugar tax has been nothing but destructive for South Africa. While the Nedlac study demonstrated concrete proof of job losses, no evidence has been provided to show the tax has reduced obesity or improved the health of South Africans in any way," it further stated.
IOL News
16-05-2025
- Business
- IOL News
Rethinking the sugar tax in the time of global uncertainty: focus should be on jobs and the economy
Strong wind creates a dust cloud behind a workman on a tractor in sugar cane fields in the Umhlali area, North Coast, KwaZulu Natal. Image: Karen Sandison/ Independent Newspapers As South Africa awaits Finance Minister Enoch Godongwana's third budget framework this year, local industries are also coming to terms with the uncertainty that 2025 has brought to the international trade environment. Even though the US has suspended the proposed 30% tariff on South African goods for 90 days – instead levying 10% for the time being – the change to existing trade agreements and uncertainty is still harmful to local industries like South Africa's sugarcane growers. This is a new threat to a local industry already beset by many challenges. The recent extreme, unseasonable rainfall in KwaZulu-Natal has caused isolated flooding and delayed the start of the harvesting season in some sugarcane producing areas. Cheaper sugar imports, often from countries with subsidised sugar industries, are threatening once again to eat into our proudly local produce. And the spectre of the Health Promotion Levy (or sugar tax) still hangs over the industry. SA Canegrowers welcomed Minister Godongwana's decision in the two previous budget drafts to not increase the sugar tax beyond its current level. But the reality is that there is no reason for this tax to be retained at all. Since it was introduced in 2018, it has not achieved any of its stated health goals and has been destructive in many other ways. It has suppressed economic activity and cost jobs and has not generated significant revenue for the Treasury. The South African Revenue Service (SARS) still lists the sugar tax as a policy tool aimed to decrease obesity and other non-communicable diseases. The tax aims to reduce consumption of drinks containing sugar, which in theory should have an impact on the health of South Africans. But after seven years of the tax, no evidence has been provided that it reduces disease or obesity. Yet what we do know is that it is very harmful to the rural agricultural communities that rely on sugarcane growers for jobs and stability. A Nedlac study conducted at the time of its introduction found that the sugar tax wiped out R2 billion in revenue from the industry in 2018/19 alone. At its core, the sugar tax is a policy failure because it costs livelihoods. Rural communities, particularly in KwaZulu-Natal and Mpumalanga, are bearing the brunt of this economic squeeze. Thousands of jobs have already been lost in the industry, and further tax hikes would only worsen the situation. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Since the introduction of the sugar tax, the sector has been operating under this sustained economic strain, exacerbated by global and domestic challenges. Now we are contending with an uncertain global trading environment, and potentially punitive tariffs from a significant market for South Africa's sugar exports. This volatility is directly felt by South Africa's growers. Small-scale growers, who are the economic anchors of their communities, are especially at risk of exiting the industry should the sugar tax burden continue, according to a modelling study done by the Bureau for Food and Agricultural Policy (BFAP). It is important to note that such modelling was also done before the current potential upheaval in SA-US trade, and losing a key market for SA sugar would even further exacerbate this problem. Having small-scale growers exit the industry would be tragic, since the sugar industry has put in place many initiatives to give these growers equitable and equal access to economic opportunities over many decades. These initiatives align with the government policy for a more transformed and inclusive agricultural industry. There is an immediate opportunity for our government though: scrapping the sugar tax completely to give the sugar industry the runway to deal with the many other external threats. SA Canegrowers has consistently advocated for a comprehensive dietary intake study to better understand the multifaceted causes of obesity and non-communicable diseases in South Africa. Such a study was initially proposed under the Sugar Industry Value Chain Master Plan's first phase, started in 2020 - but it has not yet been undertaken. A commitment from the government to this research can still facilitate evidence-based policymaking. The Master Plan also lays out ways the sugar industry could support a growing and expanding economy. Diversification holds the potential to create jobs, bring new direct investment into South Africa, and create a more resilient economy that can weather global shocks. There are opportunities to expand into biofuels, sustainable aviation fuels (SAFs), and other sugarcane-based products. But we need government commitment to make these a reality through cohesive policies and a stable environment to attract investment. This will, in the long run, create a stronger, more resilient economy, with a larger tax base. This can provide the Treasury with more funds to allocate to healthcare and other critical public services. Instead of stifling growth with short-sighted taxation, policymakers should prioritise long-term economic strategies that will ultimately benefit both public health and the national economy. If the government truly seeks to improve public health, it must take a more comprehensive approach—one based on scientific and economic evidence. The sugar tax is not the solution; it is a big part of the problem. Higgins Mdluli, chairman of SA Canegrowers BUSINESS REPORT Visit:
Zawya
14-03-2025
- Business
- Zawya
South Africa's 2025 budget: No fuel levy and sugar tax increases, a positive outcome for agriculture
Following a tumultuous start to the 2025 Budget season, South Africa's Finance Minister Enoch Godongwana finally delivered the much-anticipated expenditure plan. Hopefully, implementation is expedited to unlock and accelerate economic activity. The 2025 Budget presented is a far departure from the original budget before the postponement as the most contentious issue of a 2% hike in value added tax (VAT) was watered down to a modest half a percentage point for 2025/26 to 15.5% beginning 1 May 2025 and a further half a percentage point for 2026/27. From an agricultural perspective, farmers can sigh in relief that the general fuel levy for 2025/26 was not increased. Fuel accounts for almost 13% of production costs in the grain sector and is critical for the distribution of all types of produce and inputs to and from markets across the country. Further, there was no mention of changes to the Health Promotion Levy (HPL) after the industry was given a two-year breather on levy increases to afford it time to diversify and restructure. The government's commitment to infrastructure investment through payments for capital assets that are projected to account for 5.1% of total spending with an annual growth of 8.1% over the next three years bodes well for boosting confidence in the sector. Agriculture growth remains constrained by the deteriorating logistics infrastructure such as the dilapidated roads that increases operational costs, and further investments in both rail and road facilities and services will help unlock expansion as envisaged in the country's Agriculture and AgroProcessing Master Plan (AAMP), a product of collaborative effort by government, agribusiness, labour, and civil society to revitalise and grow the sector. Social relief and fiscal sustainability Finally, the increase of R130 in pension grants and the addition of more food products to the VAT zero-rated list go a long way in alleviating pressure on consumers, thus improving prospects of affordability and accessibility of food commodities. This shows commitment to ensure fiscal sustainability, given that no provisions were made for bailouts of state-owned enterprises (SOE), which augurs well for business confidence and investment in the economy. However, this remains the finance minister's proposal until the country's parliament approves it in due course following the completion of its processes.
