An investigation into the South African health promotion levy

Abstract

South Africa is facing a major health crisis with the increasing prevalence of non-communicable diseases such as cardiovascular diseases, diabetes and obesity, for which high sugar consumption is a risk factor. The World Health Organisation called on countries to develop policies and procedures to tax sugar-sweetened beverages to curb sugar consumption and promote healthy lifestyles. South Africa implemented the Health Promotion Levy on 1 April 2018 as part of government’s intervention to combat obesity and other related non-communicable diseases. Although some evidence-based studies indicate a decline in the consumption of sugar-sweetened beverages in South Africa, the concern was identified that the current rate is too low to make a significant impact on consumer behaviour. The sugar industry, however, opposed the Levy, arguing that the implementation would lead to substantial job losses. The goal of this study was to investigate the fairness and effectiveness of the Levy, in the context of its likely success in reducing the intake of sugar, specifically by children. The background to and implementation of the Health Promotion Levy and its impact on the consumption of sugar-sweetened beverages, and on the sugar industry, was discussed, and literature on taxes on sugary-sweetened beverages was reviewed. The principles of a good tax system, and specifically as they are applicable to the Health Promotion Levy, were analysed and the design and application of the Levy were assessed against these principles. It was argued that the Levy is compliant with the equity and fairness principles of a good tax system, but only partly compliant with the certainty and simplicity principles. Although the Levy entails low administration costs, it is only partially compliant with the efficiency principle. From a transparency and accountability perspective, it was established that the Levy is also only partially compliant. The diversity of the design of taxes on sugar-sweetened beverages and their effectiveness in various countries was investigated to identify similarities, differences and reasons for changes in legislation. The most effective tax rate or levy appears to be one that results in a 20% increase in the price of a sugary drink, and the most effective tax design is one where the tax is based on the beverage’s sugar content. The investigation reflected the unequivocal agreement that a sugar tax is best supported by consumers if the revenue received from the tax is used for health promotion programmes or to subsidise healthy food alternatives. A mixed method approach, building on the strengths of both quantitative and qualitative methods, was adopted in addressing the goal of the research. This involved a questionnaire that was administered to parents of learners in a sample of schools, and semi-structured interviews with those parents willing to be interviewed. With the focus being on the consumer of sugar-sweetened beverages, it appears that South African consumers consider that the Levy is not a good tax policy as the revenue is not earmarked for health promotion purposes. It was concluded that the current rate of the Levy is too low to change consumer behaviour. The Health Belief Model of Behavior Change was applied in the interpretation of the results of the study. The six constructs of the model – perceived susceptibility, perceived severity, perceived benefits, perceived barriers, self-efficacy and cues to action – constitute the framework on which the analysis was based. The analysis of the results of the study, based on these constructs, demonstrated that the responses of participants reflect the effect of these constructs on the decisions of parents and guardians regarding the consumption of sugary sweetened beverages. The main recommendations were that the tax revenue generated from the Levy should be earmarked for health promotion, and that this would increase taxpayers’ support for the Health Promotion Levy, that the rate of the Levy should be increased, and that education and communication campaigns should be used to raise awareness about the impact of sugar on non-communicable diseases and to encourage the reduction of the consumption of sugar-sweetened beverages.