The Health Promotion Levy (HPL) on sugary beverages is a levy that was introduced, in support of the South African Department of Health’s Strategic Plan for Prevention and Control of Obesity and aims to reduce obesity by 10% by 20205. … The remaining 21g of sugar will be taxed at a rate of 2,21 cents per gram.
How will tax on sugar-sweetened beverages benefit South Africa?
In 2018, the South African government implemented a 10% excise tax on sugar-sweetened beverages (SSB). Evidence from other countries suggests that a tax on SSBs is likely to reduce consumption and reduce the increasing burden of obesity-related non-communicable diseases.
What is the sugar tax in South Africa?
Three years ago South Africa introduced Africa’s first major tax on sugar-sweetened beverages based on grams of sugar. The tax now stands at about 11% of the price per litre.
Is Sugar Tax elastic or inelastic in South Africa?
The magnitude of the CSD own-price elasticity is greater than one, implying that CSDs are price elastic with a 20% price increase corresponding to a nearly 24% reduction in demand for carbonated soft drinks.
Is sugar tax a good tax?
Sugar tax is arguably (by some) akin to a sin tax as both aim to decrease consumption and increase revenue. In addition to raising revenue, sin taxes are often imposed to reduce negative externalities such as abuse.
Does sugar tax work in South Africa?
There is convincing evidence to support a positive link between the intake of SSB and the risk of obesity, diabetes and other conditions, such as stroke and heart disease. SSB consumption rates among urban and rural communities in South Africa have increased considerably over the past 20 years.
How much is a sugar tax?
Manufacturers of soft drinks containing more than 5g of sugar per 100ml have been made to pay a levy of 18p a litre to the Treasury, or 24p a litre for sugar content over 8g per 100ml, since the tax came into force in April 2018.
Does sugar tax reduce obesity?
Higher prices, better health
A UK modelling study advocating a gradual reduction in the sugar content in sweetened beverages estimated that a 40% reduction in added sugars over five years would reduce the number of obese adults by roughly half a million and new cases of type 2 diabetes by around 300,000.
Why do we pay sugar tax?
The sugar tax is a levy put on drinks companies to crack down on high sugar levels in soft drinks. Companies are now taxed according to the sugar content of their wares. … The sugar tax is designed to reduce the consumption of drinks with added sugar.
Is the sugar tax working?
This data suggests the sugar tax has been effective in pushing firms to reformulate soft drink products – but companies not impacted by the tax have not been cutting sugar levels in their products to the same extent.
How does sugar tax affect businesses?
As a result, the tax has also had a big impact on restaurants, retailers and pubs, with these businesses forking out more money to cover the tax and, in many cases, passing on the cost to consumers. Wetherspoons has said that the tax cost them an additional £3 million per year.
How does an increase in VAT affect the economy?
In particular, raising VAT will have a negative effect on productivity growth. Increasing its rate reduces the economic incentives to trade and therefore hampers the division of labour and the associated productivity gains from increased specialisation, economies of scale and so on.
Where does the sugar tax go?
Money from the first year of the tax, introduced in April 2018, went towards ventures such as breakfast clubs and children’s sport activities. The Treasury has forecast a potential income of £1.37bn over four years from 2020-24, or more than £340m per year, from the levy.
Why the sugar tax is bad?
The sugar tax is doubly regressive as low-income households tend to drink more sugary drinks than richer ones. Many people in the UK are struggling with the high cost of living and find it difficult to make ends meet. The sugar tax makes things even harder – taking more money from the people who have the least.
Why Australia should not have a sugar tax?
One of the most common arguments used to oppose taxes on sugar-sweetened beverages is that such taxes are regressive, and it is unfair to make poorer people pay a larger share of their limited incomes to consume these products, when compared to wealthier people.
Should government tax sugary drinks?
A tax on sugary drinks can help: Raises revenue for important programs like healthier food in schools, increasing access to healthy food for low income people, initiatives to prevent diabetes and other chronic diseases, education campaigns about sugary drinks and healthy eating, and universal pre-k.