Not making the necessary up-and-down adjustments to South Africa’s sugar duties on two occasions last year has cost the country’s tax authority and the industry R18 million in lost revenue, XA Global Trade Advisors has found.
According to Arista Nel, a trade analyst in economics at the consultancy firm, the first adjustment should have been on July 23 last year, “when the duty should have increased from R0.00 to R0.15 per kilogram”.
“The second instance was in September when the duty should have reverted to R0.00 per kilogram.”
Nel said missing the adjustments “highlights the importance of promptly addressing duty triggers to avoid financial repercussions”.
“Going forward, all stakeholders must ensure that duty adjustments are implemented in a timely manner to prevent further losses.”
Nel was responding to the most recent duty adjustment on March 15, when the duty on sugar increased from R0.00 to R2.41.
“The trigger for this duty adjustment was on January 9, as determined by the International Trade Administration Commission (ITAC).
“Notably, this particular duty trigger was promptly addressed and signed off on January 19.”
Nel explained that the sugar duty in South Africa operated through a mechanism known as the Dollar-Based Reference Price.
“This mechanism aims to reflect both global market dynamics and local industry needs. It compensates for situations where international sugar prices are either too low or too high.”
She added that the current context underscored the delicate balance required to protect the industry while maintaining competitiveness.
