Sugar tax is a revenue grab that will have zero health benefit to SA and may worsen socio-economic circumstances
14 September 2016
A report released by the IRR this morning shows that the proposed sugar tax will do almost nothing to improve the health of South Africans. It is rather an attempt to raise more money by a desperate government that is running short of revenue. The tax will place more financial pressure on already stressed households and worsen their socio-economic position.
International experience shows that sugar taxes work badly in countering obesity, notes the IRR in a policy paper on the Treasury’s proposal to introduce a 20% excise tax on sugar-sweetened beverages (SSBs) next year.
Despite their ineffectiveness, sugar taxes get by far the most media attention – while more successful interventions are largely overlooked. That sugar taxes yield useful amounts of revenue is also why governments prefer them to initiatives known to work far better against obesity.
This international experience is directly relevant to South Africa, where the yield from the proposed SSB tax is likely to be substantial.