Sugar tax in South Africa came into effect on 1st April 2018. Abby Courtenay recaps what sugar tax is, the aims and how it will affect you.
Firstly, what is sugar tax?
We all know (or should know) what tax is. It is a compulsory payment you make to the South Africa Revenue Service (SARS) on a regular basis to fund the South African government and their initiatives.
Sugar tax is similar but rather than being compulsory it is a method to dissuade consumers on a household level (this means you) from purchasing and subsequently consuming less healthy sugary choices by making them more expensive.
Whilst we are currently unsure of how South African’s will react to these increases, studies from around the world have shown that only when a hefty sugar tax (up to 20%)1 is implemented does this truly have an impact on consumer spending.
In some countries, when foods become more expensive, consumers tend to look for less expensive substitutes. In this case, beverages that are light/zero or sugar-free (usually artificially sweetened) may be a cheaper (but similar) substitute that consumers might lean towards.
This tax might also drive manufacturers to find innovative ways to reduce the amount of sugar in their products to prevent the tax from affecting their sales.
In a modelling study in South Africa it has been predicted that a sugar tax increase of 20% may reduce obesity rates by 3,8% in males and 2,4% in females.2
What are the sugar tax charges?
Currently, sugar tax is to be implemented only to sugar sweetened beverages (SSBs), syrups and other concentrates, not food nor 100% fruit juice or milk. Sugar tax will be charged at the following rates:3,4
- There is a threshold of 4g sugar/ 100mL of beverage below which sugar is not taxed.
- SSBs in excess of 4g sugar/ 100mL beverage will be taxed at 2,1 cents per gram above this rate (this is approximately 11% for the most popular soft drink).
- Syrups and concentrates in excess of 4g sugar/ 100mL beverage will be taxed at 1,05 cents per gram above this rate.
What will happen with this extra money?5
The revenue generated from sugar tax should ideally be used to fund further investigations and interventions, to help reduce obesity in our country. Obesity is rapidly growing out of proportion, much the same as many South African’s waist lines.
Why is it important to reduce your intake of free and added sugars?
Firstly, let’s define what free and added sugars are:
Free sugars are energy-providing sugars, such as monosaccharides (e.g. glucose, fructose, galactose) and disaccharides (e.g. lactose, maltose and sucrose – called table sugar), that are added to foods and drinks during processing by food manufacturing companies, cooks or consumers, as well as sugars naturally present in honey, syrups, fruit juices and fruit juice concentrates – so free sugars include added sugars.
Free sugars do not include intrinsic sugars, which are sugars incorporated within the structure of intact fresh fruits and vegetables, and sugars naturally present in milk.5
There is a large body of evidence that links a high intake of free and added sugars (especially in the form of SSBs) to an increased overall energy intake and subsequently weight gain (and an increased risk of becoming overweight or obese).6,7
Obesity in South Africa
We know that this is a huge (pun intended) problem for South Africans; with up to 65,1% of women and 31,2% of men being overweight or obese and alarmingly, 22,9% of children aged 2-14 years are already overweight/obese.8 Obesity substantially increases your risk for diseases, such as diabetes, heart disease, cancer and respiratory diseases.
In addition to this bleak picture, a high intake of free sugars also increases your risk for dental caries a.k.a rotten teeth.6,7 Treating and managing these diseases places a huge financial burden, not only on the patient and their family but the South African healthcare system as a whole.
The World Health Organization (WHO) recommends that no more than 10% of your total energy intake should come from free/added sugars, and they recommend a further reduction to 5% for additional health benefits. In household measurements, this equates to < 6 – 12 tsp added sugar per day (and to put this into context, 1 x 330mL tin of popular soft drink can contain up to 9 tsp added sugar).
We must always remember that many sugar sweetened products are high in energy and do not contain a significant amount of beneficial nutrients (vitamins and minerals). Thus, when you consume them, you’re displacing more nutritious food options thus decreasing the overall quality of the diet and placing the risk of micronutrient deficiencies.8
So, will sugar tax alone help decrease the burden of disease in our country?
It is important to note that whilst price is a major determining factor for many, it is not the only one. Factors, such as taste and cultural norms, also shape purchasing decisions. Interestingly, only 1 in 7 women consider health aspects when purchasing food.8 Just as taxing tobacco does not reduce or stop people from smoking, taxing SSBs will not reduce or stop all purchasing and consumption of SSBs and reduce obesity on its own. So, on its own it is not enough, however, it is potentially a step in the right direction as part of an overall strategy to tackle a complex problem.5
References:
- Powell, LM., Chriqui JF, Khan T, Wada R, Chaloupka FJ. Assessing the potential effectiveness of food and beverage taxes and subsidies for improving public health: a systematic review of prices, demand and body weight outcomes. Obesity Reviews, 2013; 14:110-128
- Manyema M, Veerman LJ, Chola L, Tugendhaft A, Sartorius B, Labadarios D, et al. (2014) The Potential Impact of a 20% Tax on Sugar- Sweetened Beverages on Obesity in South African Adults: A Mathematical Model. PLoS ONE 9(8): e105287. doi:10.1371/journal.pone.0105287
- Economics Tax Analysis Chief Directorate. Taxation of Sugar Sweetened Beverages: Policy Paper. 8 July 2016. http://www.treasury.gov.za/public%20comments/Sugar%20sweetened%20beverages/POLICY%20PAPER%20AND%20PROPOSALS%20O N%20THE%20TAXATION%20OF%20SUGAR%20SWEETENED%20BEVERAGES-8%20JULY%202016.pdf
- Republic of South Africa, Minister of Finance. Draft: Rates and Monetary Amounts and Amendment of Revenue Law Bill. 22 February 2017. http://www.treasury.gov.za/public%20comments/Draft%20Rates%20and%20Monetary%20Amounts%20and%20Amendment%20of%20Reve nue%20Laws%20%20Bill%20-22%20February%202017.pdf
- Association of Dietetics in South Africa (ADSA). Position Statement on the Proposed Taxation of Sugar-Sweetened Beverages in South Africa. April 2017. http://www.adsa.org.za/Portals/14/Documents/2017/March/ADSA%20Position%20Statement%20on%20Sugar%20Tax_Updated%20post%20budget%20speech_2%20Mar%202017.pdf
- World Health Organization. Guideline: Sugars intake for adults and children. Geneva: World Health Organization; 2015 (http://www.who.int/nutrition/publications/guidelines/sugars_intake/en/)
- Scientific Advisory Committee on Nutrition. Carbohydrates and Health. 2015, London, TSO (https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/445503/SACN_Carbohydrates_and_Health.pdf)
- Shisana O, Labadarios D, Rehle T, Simbayi L, Zuma K, Dhansay A, Reddy P, Parker W, Hoosain E, Naidoo P, Hongoro C, Mchiza Z, Steyn NP, Dwane N, Makoae M, Maluleke T, Ramlagan S, Zungu N, Evans MG, Jacobs L, Faber M, & the SANHANES-1 Team (2014) South African National Health and Nutrition Examination Survey (SANHANES-1): 2014 Edition. Cape Town: HSRC Press. (http://www.hsrc.ac.za/uploads/pageNews/72/SANHANES-launch%20edition%20(online%20version).pdf)