• Health Promotion Levy
  • Press Releases

In anticipation of the upcoming budget speech HEALA is reiterating its call on Finance Minister Enoch Godongwana to increase the Health Promotion Levy (HPL) to the recommended rate of 20% to ensure that all South Africans, particularly the most vulnerable, realise their right to nutritious food.

Research shows that South Africa’s children are starving. Experts warn that nearly five million South African children live below the poverty line. A lack of adequate nutrition in the early years of a child’s life is one of the leading causes of stunting. Children with stunting are more likely to grow up to be obese and overweight. We know that obesity is linked with an increased risk of life-threatening non-communicable diseases such as diabetes and heart disease.

Growing evidence shows that health taxes are the most cost-effective tools for controlling the consumption of unhealthy foods.  That is why we are calling on the National Treasury to increase the HPL to the World Health Organisation’s (WHO) recommended 20% rate with annual inflation-related increases thereafter and immediately begin the public consultation process of expansion to fruit juices and lowering the 4g threshold.

As it stands, the Child Support Grant has not kept up with rising food prices, and so many children and families go hungry.

HEALA strongly believes that the HPL is one of many effective ways to ensure that South Africa’s children are taken care of. Furthermore, we believe that it is the  responsibility of the Finance Minister to raise enough funds to increase the Child Support Grant to at least the Food Poverty Line, which is currently R760 per person per month.

“Earlier this month we heard during the State of the Nation that more than half of South Africans live in poverty. We see how this plays out in the Eastern Cape with 1 in 4 children being stunted. We know that 1 in 5 households have experienced food insecurity. Social support grants can ensure that South Africans access the most basic of needs: food and water. We cannot live in a country where one-half struggle to live, while we also host the most billionaires on the Continent,” says Petronell Kruger, Programme Manager at HEALA.

For years National Treasury has failed to increase the Health Promotion Levy (HPL), which not only contributes to the fiscus but also reduces the consumption of sugary drinks, which reduces the risk of life-threatening non-communicable diseases.

These additional funds from the HPL will boost the fiscus, allowing the government to increase the child support grant. By raising the sugary drinks tax, treasury can fund this vital lifesaving intervention.

From its inception on 1 April 2018 to 31 March 2021, the HPL has generated R7.9 billion in cumulative revenue from domestically produced and imported products. Specifically, collections in 2018/19, 2019/20 and 2020/21 were R3.2 billion, R2.5 billion and R2.1 billion respectively.  An increase in the HPL to the recommended 20% could almost double the revenue collected by Treasury. In 2023 the Finance minister announced a moratorium on any increases on the HPL until 2025. We cannot keep delaying the increase to the levy and prioritising the sugar industry’s profits over our health.

“The government is doing a disservice to the sugar industry by using the HPL as a scapegoat. It is  important that we tackle the real issues: corruption by big players like Tongaat Hulett, climate change and genuine investment in diversifying the industry,” Kruger says.

“Do not punish the public. We know that poor health costs the country money. We know that poor diets are killing people. The HPL is a win-win. To suspend the HPL to try and save the sugar industry when the real issues lie elsewhere is irrational and dangerous,” Kruger adds.

HEALA believes that a healthy population is a nation’s greatest asset, by prioritising the health and overall well-being of our nation’s children, we are making an investment into our future.

ENDS

 

HEALA is a coalition of civil society organisations advocating for equitable access to affordable, nutritious food in South Africa by building a more just food system.