Budget Speech 2021: Treasury just cost South Africa billions here’s why

For interviews, contact:
Lawrence Mbalati, head of the Healthy Living Alliance (HEALA)
082 734 5414
lawrence@heala.org

24 February 2021

Treasury’s failure to raise the health promotion levy to 20% has cost the country billions in lost revenue to fight Covid-19 and is a missed opportunity to save lives in the long-term, says health advocacy organisation the Healthy Living Alliance (HEALA).

“Finance Minister Tito Mboweni’s failure to raise the country’s health promotion levy on sugary drinks to 20% is a missed opportunity to raise an estimated two billion in revenue to help fund the fight against Covid-19,” says head of HEALA Lawrence Mbalati.

Mbalati says that Treasury’s decision not to raise the levy also hurts the country’s fight to curb deadly increases in non-communicable diseases.

South Africa introduced a health promotion levy of 11% on sugary beverages to help curb the country’s sugar consumption fuelling a rise in non-communicable diseases. Currently, this levy amounts to about 46 cents to the price of an average can of original taste Coca-Cola, for instance. The tax does not apply to natural fruit juices or sweetened dairy products.

“We know that the health promotion levy works to decrease the amount of sugar people consume, reducing their risk of diseases such diabetes, high blood pressure and obesity, which has been linked to some types of cancer,” Mbalati explains. “But the levy’s benefits are only possible if it keeps pace with inflation and Treasury hasn’t meaningfully increased the levy since it was introduced in 2018.”

Diabetes and hypertension were among the top 10 leading causes of death in South Africa in 2017.

In Soweto, the health promotion levy led to a 60% reduction in sugary beverage consumption among people who consumed a lot of sugar, according to one survey. University of the Western Cape researchers found similar results from a yet to be published survey in Langa outside Cape Town that showed adults between 18 and 39 reduced their overall sugar intake by almost a third after the levy was introduced.

“The National Treasury itself proposed a sugary beverage levy of 20% in 2016 because officials know that research locally and internationally shows this is what South Africa needs to save lives,” Mbalati says.

“Every year that Treasury fails to deliver a health promotion levy of 20%, more South Africans die from diseases this levy could help prevent, and we know the poorest in South Africa are hardest hit. How much longer must they wait for the government to take action?”

HEALA will deliver a presentation to Parliament’s Standing Committee on Finance on 3 March when committee members will have an opportunity to reconsider their position and act in the interest of all South Africans — not the vested interests of the few.

For interviews, contact:
Lawrence Mbalati, head of the Healthy Living Alliance (HEALA)
082 734 5414
lawrence@heala.org

Read more:
What you need to know about South Africa’s health promotion levy

Tell Minister Mboweni a 20% sugary drinks tax is long overdue! Sign the petition to increase the sugary drinks tax and help save lives.

Sign the petition below: