National Treasury published a policy paper and proposals on the taxation of sugar-sweetened beverages (SSBs) for public comment on Friday.
The problem of obesity had grown over the past 30 years in South Africa, resulting in the country being ranked the most obese country in sub-Saharan Africa.
“Fiscal interventions such as taxes are increasingly recognised as effective complementary tools to help tackle the problem of negative externalities associated with pollution, smoking, excessive alcohol consumption and also the obesity epidemic,” National Treasury noted in a statement.
Countries such as Finland, France, Hungary, Ireland, Mexico, Mauritius and Norway had all levied taxes on SSBs, whereas other countries such the UK, Thailand and Australia had recently announced their intention to introduce such taxes as part of a package of measures to help deal with the excessive intake of added sugars.
The Minister of Finance announced in his February 2016 Budget a proposal to introduce a tax on SSBs with effect from April 1, 2017, to help reduce excessive sugar intake, following work initiated by the Department of Health (DoH).
The DoH developed a Strategic Plan for the Prevention and Control of Noncommunicable Diseases (NCDs) 2013 to 2017, and a National Strategy for the Prevention and Control of Obesity 2015 to 2020.
“These strategies set an ambitious target of reducing obesity prevalence by 10% by 2020. This strategy has identified a number of measures to address NCDs and, more especially, unhealthy diets. Among these measures, taxes on foods high in sugar are potentially a very cost-effective strategy to address diet-related diseases,” explained National Treasury.
The proposed tax, thus, came against the backdrop of a growing global concern regarding obesity stemming from overconsumption of sugar. “Obesity is a global epidemic and a major risk factor for the growing burden of NCDs, including heart diseases, diabetes and some cancers,” National Treasury warned.