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South Africa's Health Promotion Levy: excise tax findings and equity potential

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Listed:
  • Hofman, Karen J.
  • Stacey, Nicholas
  • Swart, Elizabeth C.
  • Popkin, Barry M.
  • Ng, Shu Wen

Abstract

In 2016, the South African government proposed a 20% sugar-sweetened beverage (SSB) tax. Protracted consultations with beverage manufacturers and the sugar industry followed. This resulted in a lower sugar-based beverage tax, the Health Promotion Levy (HPL), of approximately 10% coming into effect in April 2018. We provide a synthesis of findings until April 2021. Studies show that despite the lower rate, purchases of unhealthy SSBs and sugar intake consumption from SSBs fell. There were greater reductions in SSB purchases among both lower socioeconomic groups and in subpopulations with higher SSB consumption. These subpopulations bear larger burdens from obesity and related diseases, suggesting that this policy improves health equity. The current COVID-19 pandemic has impacted food and nutritional security. Increased pandemic mortality among people with obesity, diabetes, and hypertension highlight the importance of intersectoral public health disease-prevention policies like the HPL, which should be strengthened.

Suggested Citation

  • Hofman, Karen J. & Stacey, Nicholas & Swart, Elizabeth C. & Popkin, Barry M. & Ng, Shu Wen, 2021. "South Africa's Health Promotion Levy: excise tax findings and equity potential," LSE Research Online Documents on Economics 110921, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:110921
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    File URL: http://eprints.lse.ac.uk/110921/
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    References listed on IDEAS

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    1. Stacey, Nicholas & Edoka, Ijeoma & Hofman, Karen & Swart, Elizabeth C & Popkin, Barry & Ng, Shu Wen, 2021. "Changes in beverage purchases following the announcement and implementation of South Africa's Health Promotion Levy: an observational study," LSE Research Online Documents on Economics 109878, London School of Economics and Political Science, LSE Library.
    2. Scott R Baker & Robert A Farrokhnia & Steffen Meyer & Michaela Pagel & Constantine Yannelis & Jeffrey Pontiff, 0. "How Does Household Spending Respond to an Epidemic? Consumption during the 2020 COVID-19 Pandemic," The Review of Asset Pricing Studies, Society for Financial Studies, vol. 10(4), pages 834-862.
    3. Gabrielle Wills & Servaas van der Berg & Leila Patel & Bokang Mpeta, 2020. "Household resource flows and food poverty during South Africa’s lockdown: Short-term policy implications for three channels of social protection," Working Papers 22/2020, Stellenbosch University, Department of Economics.
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    Cited by:

    1. Bercholz, Maxime & Ng, Shu Wen & Stacey, Nicholas & Swart, Elizabeth C., 2022. "Decomposing consumer and producer effects on sugar from beverage purchases after a sugar-based tax on beverages in South Africa," Economics & Human Biology, Elsevier, vol. 46(C).
    2. Celia Burgaz & Vanessa Gorasso & Wouter M. J. Achten & Carolina Batis & Luciana Castronuovo & Adama Diouf & Gershim Asiki & Boyd A. Swinburn & Mishel Unar-Munguía & Brecht Devleesschauwer & Gary Sacks, 2023. "The effectiveness of food system policies to improve nutrition, nutrition-related inequalities and environmental sustainability: a scoping review," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 15(5), pages 1313-1344, October.
    3. Dale, Elina & Evans, David B. & Gopinathan, Unni & Kurowski, Christoph & Norheim, Ole F. & Ottersen, Trygve & Voorhoeve, Alex, 2023. "Open and inclusive: fair processes for financing universal health coverage," LSE Research Online Documents on Economics 119795, London School of Economics and Political Science, LSE Library.

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    More about this item

    Keywords

    equity; fiscal policy; health promotion; South Africa; 108424-001; P2CHD050924;
    All these keywords.

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

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