Online Reporter
Blessing Zvikomborero Mahwerera
WHEN the Portfolio Committee on Industry and Commerce tabled its report on the sugar value chain in the National Assembly last week, sugarcane growers in the Lowveld had reason to feel heard.
The committee, chaired by Cde Clemence Chiduwa, found what many of us have long said: the legal requirement to fortify sugar and the sugar tax make locally produced sugar more expensive than imports. It recommended that the Treasury review the sugar tax and fortification policies by December 31, 2026, to balance public health goals with industry competitiveness.
To a grower, that recommendation is welcome.
Two instruments matter most to growers: the special surtax on the sugar content of beverages, commonly called the sugar tax, and the 30 percent surtax on imported sugar. They are often discussed together, but they serve different purposes and deserve separate treatment.
Two taxes, two purposes
The sugar tax is levied under section 97(2) of the Customs and Excise Act (Chapter 23:02), introduced with effect from February 9, 2024. Statutory Instrument 16 of 2024 sets the rate at US$0,001 per gramme of added sugar in juices, soft drinks, energy drinks, maheu and similar beverages. Its stated purpose is to discourage excessive sugar consumption and raise revenue for health, including cancer equipment.
The 30 percent surtax, imposed by Statutory Instrument 50A of 2025 under section 97(1) of the same Act, applies to imported cane sugar. Its purpose is protection: to stop cheap imports from displacing sugar produced from Zimbabwean cane.
One is a health and revenue measure; the other is an industrial policy measure. Yet both land, in the end, on the same farm gate.
Growers were consulted, and spoke clearly
Growers have not been silent. When the Confederation of Zimbabwe Industries (CZI), in collaboration with Treasury, carried out its study on taxing added sugar in non-alcoholic beverages, released in May 2026, farmers from fourteen growers’ associations participated in consultations held at the Zimbabwe Sugar Development Association boardroom. These associations, which operate under one umbrella, the Zimbabwe
Sugarcane Growers Apex Council, represent 1 200 growers in Triangle, Hippo Valley and Mkwasine.
Their message was plain. The tax does not tax sugar directly, but it pushes beverage makers away from it. The CZI study found that at least 60 percent of affected beverage firms replaced sugar with sweeteners in up to 90 percent of their product lines, and that imports of sugar substitutes rose by 327 percent in the two years after the tax was introduced. Every tonne of sugar replaced by an imported sweetener is a tonne of cane that loses its market.
The study estimates that about 25 200 people, more than half of Chiredzi’s population, depend directly on sugarcane production, and that total beneficiaries could exceed 60 000. When demand for local sugar weakens, it is these households that feel it first.
A big number that hides a bigger loss
The sugar tax raised an estimated US$73 million in 2025. On its own, that figure looks impressive. But a tax must be judged by what it costs the economy as well as by what it collects.
The CZI study shows that VAT paid by the beverages sector fell from US$85,7 million in 2024 to US$71,2 million in 2025, a drop of US$14,5 million. One sugar processor saw its annual VAT payments fall from about US$12 million to US$8 million. One beverage firm’s PAYE contribution fell from about US$470 000 to US$319 000 a year.
Two Bulawayo companies laid off at least 300 workers. Profit margins on taxed products fell by at least 31 percent across all firms surveyed, and some production lines have gone dormant, with obvious consequences for corporate income tax.
At the same time, imported sugary drinks grew from 2,7 percent to about 12,7 percent of formal retail shelves, and make up 29 percent of what informal traders sell. Many enter as grey imports that pay neither duty nor sugar tax. Our own compliant producers carry the tax; smuggled products do not.
Add up the lost VAT, PAYE and corporate tax, the jobs, the foreign currency spent on sweeteners and imported drinks, and the lost cane market, and the net gain to the fiscus is far smaller than US$73 million.
It may well be negative, as the CZI study itself concludes. On health, the same study found limited evidence that sugar consumption or diabetes outcomes have improved; consumers have largely switched to imported alternatives.
Imports forced our sugar out at a loss
The second part of the problem is imports. In the 2023/24 season, local sales were so badly affected by imported sugar that the industry exported about 108 000 tonnes of excess stock, valued at US$69 million.
That is roughly US$640 a tonne, well below the US$890 to US$900 a tonne at which local sugar sells. Growers share in sugar proceeds, so every tonne pushed onto the world market at a discount reduces what they are paid for their cane.
The 30 percent surtax has helped. Industry figures indicate that local sugar demand has risen by about 34 percent compared with 2023/24, and production by about 20 percent. Growers therefore support keeping the surtax. But its design has a weakness.
Why a fixed 30 percent is not enough
Because the surtax is a percentage of the value of imported sugar, it gives the most protection when world prices are high and the least when they collapse, exactly when dumped sugar is most dangerous to growers.
In a simplified illustration, at a world price of US$700 a tonne the surtax adds about US$210; at US$300 it adds only US$90.
South Africa handles this differently. Its International Trade Administration Commission sets a Dollar-Based Reference Price, raised on August 28, 2026 from US$680 to US$785 a tonne. The benchmark is based on a six-year average world price, adjusted upward by 46 percent for distortions caused by subsidies elsewhere, less shipping costs. When the world price falls below the benchmark, the import duty rises to close the gap; when prices recover, the duty falls away. At today’s world price of about US$429 a tonne, South African imports attract about US$356 a tonne in duty. The duty is recalculated automatically when prices move, and the benchmark is reviewed every three years.
Even there, growers say the level is not enough, and beverage makers wanted it lower. That debate is healthy. What matters is that the mechanism is transparent and responds to the market.
Lessons on the sugar tax too
South Africa’s Health Promotion Levy is also better designed. It charges 2,1 cents per gramme, but only on sugar above four grammes per 100ml; the first four grammes are levy-free. Zimbabwe taxes every gramme.
A drink with modest sugar pays nothing in South Africa and pays in full here. About 40 percent of stakeholders in the CZI study supported adopting this regional threshold and reducing effective burden by at least half; many others called for outright abolition.
What growers propose
First, abolish the sugar tax, or at the very least redesign it: introduce a four-gramme threshold per 100ml, halve the effective burden, and bring artificial sweeteners into the tax base, as the 2026 National Budget already contemplates, so that the tax stops rewarding the replacement of local sugar with imported substitutes.
Second, keep the 30 percent surtax but amend its threshold. Import duty should be 30 percent or the gap between a published reference price and the landed price, whichever is higher, reviewed transparently at set intervals.
Third, tighten enforcement at borders and in informal markets, so that compliant local producers are not undercut by untaxed grey imports.
Fourth, give growers a formal seat in the Treasury review, through the Zimbabwe Sugarcane Growers Apex Council.
The review Parliament has called for
Parliament has given the Treasury until the end of this year. That is enough time to get this right, and too little to waste. Sugar matters to the households who grow it, the industries that use it and the rural economies that depend on it. The evidence is now on the table. What remains is the will to act on it.
Blessing Zvikomborero Mahwerera is a sugarcane grower and development practitioner, who writes in his personal capacity.
