The Healthy Living Alliance (HEALA) on Wednesday said it is deeply disappointed with Finance Minister Enoch Godongwana’s decision to capitulate to industry’s demands.
The Alliance said, “The decision to hike the value-added tax (VAT) instead of increasing the Health Promotion Levy (HPL) flies in the face of scientific evidence, which shows that the increase of the HPL is vital lifesaving intervention and an easy way to boost the fiscus. Godongwana has shown complete contempt for ordinary people living in South Africa. The proposed increase in VAT is a regressive measure. Indeed, leading voices on tax justice have indicated how its increase will bring thousands, if not close to millions, in our country closer to poverty and economic disaster.”
This comes after Godongwana announced during his 2025 Budget Speech that South Africans will see a VAT increase of 1%, over the next two years.
“We have lost an opportunity to save the lives of thousands of South Africans. We have lost the opportunity to protect the most vulnerable amongst us, the poor. Since its inception in 2018, the levy has contributed R10bn to the fiscus and has the potential to do more. This is money which could be spent on various health promotion interventions,” HEALA said.
“Treasury itself identified the levy as a tool reduce obesity and non-communicable diseases, an out-of-control epidemic in South Africa costing the state billions of Rands in health care and affecting low-income members of our society the most. This missed opportunity will cost millions of South Africans their lives, their welfare and their finances. It is the responsibility of the government to protect the lives and overall wellbeing of the people it serves, not coddling an industry which has been taking advantage of the government’s good will,” HEALA further added.
“The decision to implement a further moratorium after the Finance Minister’s decision in 2023 to place a two-year moratorium on an increase of the HPL points to the government’s leniency to the sugar industry and its continued decision to pander to minority interests. It is very clear that the sugar industry is being treated with kid gloves. This is despite evidence of mismanagement and graft which has caused more damage to the industry than the HPL ever could. We demand Treasury to reevaluate its decision and follow the science,”HEALA stated.
“It is deeply disappointing that the minister missed an opportunity to increase HPL to 20% to boost the fiscus and instead chose the option to rather increase VAT, which will hit hard in the pockets of the poorest of the poor, who are the most affected by non-communicable diseases (NCDs) and will put a strain on the health system. We all are experiencing non-communicable diseases in one way or the other. Either oneself, relative, family member, friend, colleague are who is living or have lost their lives due to diabetes, heart diseases or cancer. It has become clear to the Minister of Finance that the lives and livelihoods of South Africans are less important than the profits of the sugar industry. It is obvious that the sugar industry, like it’s counterparts in the alcohol and tobacco industry, will continue to disregard the effects their products have on South Africans”, Nzama Mbalati, HEALA CEO said.
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