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HomeWeekly RoundupHealth Promotion Levy garners almost R800m for Treasury

Health Promotion Levy garners almost R800m for Treasury

The tax on sugary drinks has already generated almost R800m since it was introduced on 1 April. Health-e News reports that this was according to Mpho Legote, The Treasury’s director for VAT, excise duties and sub-national taxes, who said R779m had been collected by the end of July, with a further R14m from import taxes.

The report says the tax, referred to in law as the Health Promotion Levy, amounts to a levy of 2.1c per gram of sugar although the first 4g of sugar per 100ml is exempt. It represents an 11% increase on a can of Coca Cola. The intention of the tax is to get people to limit their consumption of liquid sugar – a major cause of obesity, which brings with it numerous health dangers, primarily diabetes, hypertension, strokes, heart attacks and cancer.

Treasury has also promised to allocate a portion of the income to the Health Department to “promote health”.

The report says Sibongile Nkosi, executive director of the Healthy Living Alliance (HEALA), has warned that “South Africa has a serious and growing obesity problem, and our children are amongst the highest consumers of sugary drinks in the world”. “We would have liked government to have imposed a 20% tax on sugary drinks to make a real impact on consumption,” said Nkosi. “We also want to see the health department using the revenue from the levy to educate people about how to stay healthy.”

Health economist Nick Stacey from the Wits University research think-tank Priceless warned that, while South Africa is facing economic challenges, “we need to think more broadly about our public policy, and in evaluating its impacts we need to place greater weight on lived measures of wellbeing such as health.”

Recently, Cosatu spokesperson Sizwe Pamla, claimed that the sugary drinks tax was partly responsible for the current recession. But, the report quotes Matthew Parks, parliamentary deputy co-ordinator for Cosatu, as saying “it would be comical for us to blame the sugar tax for the recession”. He said that the sugary drinks tax is a “smaller thing” that “impacts a little less” because “industry has adjusted to accommodate it by reducing the sugar content (of drinks), and retailers are absorbing a lot of the cost themselves”.

[link url=""]Health-e News report[/link]

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