As the debate over imposing a tax on sugary beverages commenced on Tuesday, Members of Parliament (MPs) heard of concerns that the intake of sugar-sweetened beverages in South Africa was increasing steadily.
MPs were told that the intake of sugar-sweetened beverages was linked to obesity, which is a global epidemic, and that tax measures were needed to curb consumption behaviour.
The debate ensued when Parliament’s Standing Committee on Finance and the Portfolio Committee on Health held public hearings in Cape Town on Tuesday to debate the pros and cons of imposing a sugar tax on sugar-sweetened beverages.
Finance Minister Pravin Gordhan tabled a proposal in his 2016 Budget Speech for government to introduce a tax on sugary beverages amid growing concerns in South Africa and globally regarding obesity.
Dr Malcolm Freeman, the Chief Director of non-communicable diseases at the Department of Health, said the intake of sugary beverages in South Africa remained a concern.
“[According to a study] the intake of added sugar is increasing steadily in South Africa. Children consume 40 to 60 grams per day and this increases to 100 grams a day in adolescents,” he said.
Freeman said the intake of sugar-sweetened beverages was linked to obesity, which is one of the major risk factors for non-communicable diseases.
He said between 1980 and 2014, the world wide prevalence of obesity nearly doubled, with 11% of men and 15% of women – which equates to more than half a billion adults – being classified as obese.
In 2013, an estimated 42 million children under the age of five were overweight, with the highest rates of increase being observed in Africa and Asia.
South Africa is the most obese country in Sub-Saharan Africa, Freeman said.
He said being overweight, or obese, increases the risk for non-communicable diseases such as diabetes and cardiovascular disease such as hypertension, heart attacks, a stroke and cancer by four to eight times.
He said while non-communicable diseases were a burden to the healthcare system, Freeman favoured imposing food taxes as the most cost-effective way of dealing with the scourge.
Tax proposals on sugary beverages
Ismail Momoniat, the head of tax and financial tax policy at the National Treasury, said fiscal measures can be used to promote health and prevent disease aside from raising revenue.
“Globally, fiscal measures such as taxes are increasingly recognised as effective complementary tools to help tackle non-communicable diseases and obesity epidemic at a population level,” he said.
He said this could influence manufacturers’ production and consumer behaviour.
Studies suggest that a 10 to 20 percent price increase of sugar-sweetened beverages may be required to translate into meaningful impact on health outcomes, Momoniat said.
He said while there were concerns that a tax would have a negative impact on the poor, this would change consumer patterns and encourage a healthy lifestyle.
“The poorer you are, the more likely you will not purchase sugar-sweetened beverages after a price increase [with a tax], reducing [sugary beverages] consumption and in effect, reducing obesity and the non-communicable diseases risk, and in the long run, achieving better health outcomes,” he said.
He said the National Treasury proposed a tax at a rate of R0.029, or 2.29 cents, per gram of sugar.
This equates to a 20 percent tax incidence on 1 litre of Coca Cola.
“By way of example, a litre of Coca Cola has about 106 grams of sugar. This means the tax rate will be around R2.42 per litre,” he said.