Government has pressed pause on a sugar tax hike – a decision welcomed by the sugarcane industry, which says further increases would have deepened economic damage and cost more jobs.

Finance Minister Enoch Godongwana announced during his 2025 Budget 3.0 speech at a joint sitting of Parliament on 21 May that there will be no further increases to the Health Promotion Levy (HPL), commonly known as the sugar tax.

Introduced in 2018, the levy cost the industry 16,000 jobs and R2-billion in revenue in its first year, according to independent research by the National Economic Development and Labour Council (Nedlac).

An initial inflationary increase in the HPL, cancelled in the March budget, has now officially been carried through to May. The HPL was introduced to reduce sugar content in South African food products and is categorised alongside alcohol and tobacco as a ‘sin tax’.

Chairperson of SA Canegrowers, Higgins Mdluli, said any tax increase would threaten the livelihoods of growers and drive up unemployment.

“The sugar tax has been nothing but destructive. While the Nedlac study demonstrated concrete proof of job losses, no evidence has been provided to show that the tax has reduced obesity or improved the health of South Africans in any measurable way,” he said.

Mdluli urged the Treasury to scrap the tax entirely, saying it would support job creation and economic growth.

“Agricultural jobs are critically important to the stability of South Africa. 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 employment,” he added.

Pratish Sharma, director of the South African Cane Growers Association and chairperson of the Maidstone Local Grower Council, expressed relief at the announcement.

“The Health Promotion Levy always has us on edge come budget time,” he said.

“Our industry is close to the margin. Any increase would be devastating.”

iLembe Chamber of Commerce, Industry and Tourism CEO, Cobus Oelofse, echoed the sentiment.

“The news is a welcome breather, for both individual farmers and the industry,” he said.

“The Health Promotion Levy has been controversial since its introduction, risking jobs in a critical sector of our region’s economy. Cane farming – both commercial and small-scale – is a significant income provider in our rural hinterland, where alternative employment is scarce.”

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