POLITICS

Concern from sugar industry noted – Committee on Trade and Industry

Joanmariae Fubbs acknowledges that sugar tax could have adverse impact in short run

Trade and Industry Committee notes concern from sugar industry regarding 'sugar tax'  

28 February 2019

Parliament’s Portfolio Committee on Trade and Industry has taken account of the concerns raised recently by the sugar industry related to the impact on the industry of the implementation of the Health Promotion Levy (HPL), commonly referred to as the “sugar tax”, and has resolved to engage the Minister of Trade and Industry on the matter.

Committee Chairperson Ms Joanmariae Fubbs said the committee recently received correspondence to this effect, and of the mitigation measures agreed to at the National Economic Development and Labour Council (Nedlac) that would have ameliorated its impact, but which were not fully implemented.

Ms Fubbs said that although the HPL falls outside the mandate of Trade and Industry, “its implementation could, in the short-run, have an adverse impact on direct and indirect employment in the sugar industry. Other challenges such as transformation in the agricultural and agro-processing sectors”.

As for tariffs and illegal sugar imports into South Africa, the Chairperson pointed out that these have been addressed. It appeared that the South African Revenue Services encountered a computer glitch in this regard.

Earlier this month, the Democratic Alliance (DA) wrote to Ms Fubbs requesting an urgent joint meeting with the committees of Agriculture, Forestry and Fisheries and of Land Reform and Rural Development to discuss the imminent threat facing the sugar industry. Ms Fubbs indicated that other national and provincial stakeholders in the Public Sector Committee have been and will continue to engage with the sugar industry. The last on-site meeting with stakeholders from private and public stakeholders in the sugar industry took place in December 2018.

Unfortunately, given Parliament’s programme before it rises on 20 March 2018, it will not be possible to organise such joint meetings nor undertake another site visit. Nonetheless, as part of the committee’s robust oversight, a meeting held on Tuesday, 26 February 2018, where the Department of Trade and Industry including the Director-General Mr Lionel October responded to the committee’s written questions about the challenges in the sugar industry, the committee resolved that the Minister of Trade and Industry should:

- Engage with the Minister of Health and of Finance to discuss the impact of the HPL on the sugar industry.

- Together with relevant stakeholders, ensure compliance with the implementation of the mitigating measures agreed to at Nedlac with respect to the implementation of the HPL.

- Ensure that the sugar industry utilises is full quota with the European Union, as well as moving towards diversifying its output, in particular with respect to ethanol.

The committee will also cover issues relating to the sugar industry in its legacy report, so that the next Parliament can continue this work. The committee wishes to emphasise that is has been engaging with all industry role players since 2017 to understand and address the challenges in this sector, including transformation.

Issued by Rajaa Azzakani on behalf of Parliamentary Communications Services, 28 February 2019