Health advocacy group calls for sugar tax to be doubled to fund fight against Covid-19
Advocacy group the Healthy Living Alliance (Heala) believes if SA doubled its sugary drinks tax, it could raise billions to help fund the fight against Covid-19.
Lawrence Mbalati, head of Heala, said beverages are taxed about 2.21c per gram of sugar for anything over a four gram threshold.
The advocacy group was at the forefront of pushing for the sugary drinks tax implemented in 2018.
“The current levy adds about 46c to the price of an average can of original taste Coca-Cola, for instance. The levy does not apply to natural fruit juices or sweetened dairy products.
“Within its first two years, the health promotion levy has generated R5.4bn for government.
“This would have been enough to finance SA’s down payment for Covid-19 vaccines from the Covax facility almost 20 times over, despite the health promotion levy’s relatively small contribution to government’s overall budget.
“If the National Treasury doubled the health promotion levy, it could net the government around R2bn to help fund the fight against Covid-19 in the short term”
Mbalati said the estimate is based on current consumption levels and the revenue already raised by the levy.
“Raising the health promotion levy to 20% is absolutely critical to not only fund the Covid-19 fight but also to save lives now and in the future."
“In 2018, SA introduced a health promotion levy of about 11% on sugary beverages to help curb the country’s sugar consumption which is fuelling a rise in non-communicable diseases such as diabetes, high blood pressure and obesity.
“This is a watershed moment for the country. Government revenues are under immense pressure and funding the fight against Covid-19, including vaccines, remains critical.”
Mbalati believes policymakers have an opportunity “to increase the health promotion levy to 20% to raise additional revenue in the short term”.
“In the long term, we know a health promotion levy of 20% will reduce the amount of sugar people consume, decreasing their chance of developing conditions that also put them at a higher risk of dying from Covid-19.”
Globally, being obese has been shown to increase a person’s risk of dying from Covid-19 by almost 50% and more than doubles the risk of being hospitalised, according to a recent analysis published in the journal Obesity Reviews.
“SA’s health promotion levy has already led some beverage makers to reduce the amount of sugar in their drinks.
“One study by Priceless SA found the levy also reduced sugary beverage consumption by 60% among people in Soweto who consumed a lot of sugar.
“There is no evidence to date that the levy has led to job losses in the sugar or beverage industry, contrary to industry claims,” said Mbalati.
In 2019 the SA Cane Growers Association said the tax had resulted in lost revenue totalling R111.4bn in a struggling industry.