Hike in tax on tobacco, liquor and sugar urged

AN INCREASE in the taxes on tobacco, alcohol, sugary drinks and carbon could improve the health outcomes of the South African population, says the Priceless SA secretariat, a division of the Wits School of Public Health.

In its report, launched this week, it said there was evidence for certain fiscal measures, including taxes and subsidies, to address health impacts and improve public health.

With the rise of non-communicable diseases such as diabetes and heart disease, as well as the scourge of HIV/Aids, much work was needed to address health needs, the report stated.

“While clinical care is one essential component of a population health improvement strategy, by itself it will not solve all South Africa’s health problems. This is particularly true for the non-communicable disease (NCD) epidemic that continues to grow,” the report stated.

“Behaviours that fall into the lifestyle category are the major drivers of poor health outcomes from NCDs, leading with alcohol, tobacco, high body mass index, and poor dietary choices.”

Priceless SA director professor Karen Hofman said fiscal policies were powerful but often overlooked tools for improving population health and health equity.

“Using fiscal instruments to achieve positive health outcomes is not a new strategy, but this report suggests that they could be used to much greater effect by saving lives, cutting costs, raising revenue and preventing a great deal of illness, and will help to contain the ballooning costs of health care and social grants.”

Priceless SA reviewed a set of potential fiscal policy instruments that could tackle the disease burden. They included excise taxes, subsidies and income transfers.

Taxes, such as those on alcohol and tobacco, presented the opportunity to reduce the occurrence of behaviours responsible for lifestyle and NCDs. Among other interventions considered were subsidies to reduce the economic burden of transportation on pregnant women and incentives for chronic disease treatment adherence.

With regard to the added tobacco tax, the report stated: “The rise in excise levies on tobacco taxes has coincided with a significant drop in consumption. Despite this progress, tobacco smoking was listed as the fifth largest cause of lost years of healthy life in South Africa by the Institute for Health Metrics and Evaluation’s Global Burden of Disease 2010 study. Smoking is associated with increased risk of various cancers and cardiovascular disease.”

While the World Health Organisation recommends the excise tax, not including sales or VAT, on cigarettes should equate to 70% of the retail price, and the World Bank recommends that all taxes, excise and other, on cigarettes should equate to between 66% and 80% of the retail price, taxes on tobacco in South Africa amount to 52% of the price.

“Thus, by international standards, there is both room and a need for an increase in the taxation of tobacco.”

The report suggested a higher tax on alcohol, saying alcohol consumption was associated with HIV incidence and reduced antiretroviral treatment adherence, while high blood-alcohol levels were associated with road traffic injury and interpersonal violence.

The report also proposed increasing the tax on sugar-sweetened beverages, which could help to reduce the growing number of obese people. In 2012, the prevalence of obesity and overweight people was estimated to be 39.2% among women and 12.2% among men.

‘Clinical care alone won’t solve the health problems in SA’