A group of economic, medical and public health scholars have published an open letter to the National Treasury and South African Revenue Service (SARS), calling on the groups to double South Africa’s health promotion levy – commonly known as the ‘sugar tax’.
In a full-page advertisement in BusinessDay, the group said that increasing the tax would help raise revenue and fight rapidly increasing cases of diet-related diseases such as type 2 diabetes in South Africa.
The letter includes signatures from professors at the University of Cape Town, Wits University, and Harvard and is supported by lobby group Healthy Living Alliance (HEALA).
Doubling the current levy will help reduce sugar consumption, increase revenue significantly and increase the health benefits, the scholars said.
The levy currently adds about 11% to the cost of sugary beverages to help curb the country’s sugar consumption, which health experts say is fuelling a rise in non-communicable diseases, such as diabetes, high blood pressure and obesity.
Currently, beverages are taxed about 2.21 cents per gram of sugar for anything over a 4-gram threshold. The current levy adds about 46 cents 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 R5.4 billion for the government.
HEALA has previously called on Treasury to double South Africa’s health promotion levy as part of its national budget.
“This would have been enough to finance South Africa’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,” said the head of the Healthy Living Alliance (HEALA) Lawrence Mbalati.
“If the National Treasury doubled the health promotion levy now, it could net the government around R2 billion to help fund the fight against Covid-19 in the short term. This estimate is based on current consumption levels and the revenue raised by the levy already,” he said.
He added that if Treasury doubled the levy and raised R2 billion, that would be enough to pay for several thousand new nurses and doctors, as well as tens of thousands of community healthcare workers based on average salary ranges.