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To: President Ramaphosa, Finance Minister Mboweni, and the Chief Whips of all political parties on behalf of Parliament

Help fight type 2 diabetes, demand the Sugary Drinks Tax is increased to 20%

With almost 10,000 new cases of diabetes reported each month, we can’t afford to have our health budget reduced by R350 million. We need a tax to help increase our health budget, while also reducing consumption of sugary drinks to help fight type 2 diabetes..

We call on you to stand up to companies like Coca-Cola who watered down the Sugary Drinks Tax from the 20% health experts recommended to 11%. We demand that the Health Promotion Levy be increased to 20% from 1st April 2020. We call on Minister Mboweni to commit to this in the 2019 Mid-Term Budget Policy Statement. Unlike the VAT hike which we were not consulted on, a Sugary Drinks Tax has public support and means a healthier people and more funding for health.

To realise universal health care through the National Health Insurance, we must act now to reduce the burden on our health system and budget. A 20% Sugary Drinks Tax will help make the NHI more financially viable.

Why is this important?

Companies like Coca-Cola have been allowed to sell a product that drives type 2 diabetes [1] and they have specifically targeted poor communities who have the least access to quality health services [2]. We all know that many of our schools and spaza shops are covered with Coca-Cola adverts, and for decades many of us didn’t know the truth about sugar in cold drinks, and now many people have family members who are too sick to work. While Coca-Cola makes millions, the queues at our clinics grow longer. In 2017 there were over 100,000 new diabetes cases in the public sector alone [3].

There’s hope though. Thanks to public pressure a Sugary Drinks Tax was introduced in 2018, but our work isn’t done yet. Because of companies like Coca-Cola, the tax was watered down to almost half of what Wits academics have said it needs to be: 20% [4].

89% of private companies were found not to be paying taxes properly in 2017 [5], yet every day we have to bear the high costs of the VAT hike, and yet there isn’t enough for government funding for health and education. Because of private companies not paying taxes properly, Treasury has cut R350 million from our health budget since the February 2019 budget and now [6] [7]. We need much more money for our health budget, not less.

Between now and February 2020, Treasury may make big decisions about our budget and taxes. We know that wealthy companies and individuals will be fighting against taxes on themselves and their products, but if enough of us come together, we could send a clear message to Treasury that we want a strong sugary drinks tax of 20% announced in February 2020 budget speech. We stopped Coca-Cola’s attempts to scrap the Sugary Drinks Tax last year, and now more than ever, we need a strong taxes on products that can be deadly to our health, products like sugary drinks, cigarettes and alcohol. A 20% sugary drinks tax could fill the R350 million hole in our health budget, and prevent more people from consuming sugary drinks which drive diseases like type 2 diabetes, heart disease, liver and kidney damage, and some cancers.

[1] Decreasing the Burden of Type 2 Diabetes in South Africa: The Impact of Taxing Sugar-Sweetened Beverages
Mercy Manyema, J. Lennert Veerman, Lumbwe Chola, Aviva Tugendhaft, Demetre Labadarios, Karen Hofman
Published: November 17, 2015
[2] Big business - and people - grow fat on sweetened drinks. Lynley Donnelly for Mail & Guardian 1 June 2016
[3] Junk food, junk status cause skyrocketing medical costs. Amy Green for Health-e News 24 April 2017
[4] Sugar tax could save South Africa billions in diabetes costs. Thabo Molelekwa 29 April 2016 Health24
[5] Corporates ‘not tax compliant’. Baldwin Ndaba for The Mercury, 22 Aug 2018.

South Africa

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2019-07-25 12:32:39 +0200

The Finance Minister did not commit to increasing the Sugary Drinks Tax (Health Promotion Levy) to 20%, however it was increased slightly in line with inflation. We will continue to campaign for the Sugary Drinks Tax to be increased to 20% from 1 April 2020.