Picture: SUNDAY TIMES
Picture: SUNDAY TIMES

THE Department of Health believes that "taxes are an excellent mediator of consumer behaviour".

In a statement outlining the department’s position on the proposed tax on sugar-sweetened beverages‚ it said it was the Treasury‚ not the department‚ that had made the decision "as part of their 2016 budget process".

It was‚ nonetheless‚ deemed a "best buy in the Strategic Plan for the Prevention and Control of Non-Communicable Diseases 2013-17 as well as in the Strategy for the Prevention and Control of Obesity 2015-2020" of the department.

To support its stance‚ it quoted "research done by Priceless at the University of the Witwatersrand (which) suggests that a 20% sugar-sweetened beverages tax could lead to a reduction by 3.8% in men and 2.4% in women or a decrease in obese people by 220,000 — mostly in the first three years".

READ THIS: DA will reject sugar tax if it is simply to raise revenue and not improve health

"On the other hand‚ without a tax‚ soft drinks are projected to grow 2.4% per year‚ predominantly amongst poorer people and this could lead to a 16% increase in obesity by 2017, of which 20% would be due to sugar-sweetened beverages‚" the department said.

Conceding that the department had "not done specific calculations on costs to the economy‚ we have noted the global World Health Organisation estimates that high BMIs (body mass index) drive between 2% and 7% of global healthcare spending with up to 20% of all healthcare spending attributable to obesity‚ through related diseases such as type 2 diabetes and heart disease".

"We do not have figures for the impacts of obesity on the economy as a whole‚ but these would be substantial in terms of absenteeism due to obesity related illness and attendance at health facilities‚ lethargy at work and other impacts‚" the Department of Health said.

On Tuesday‚ the DA said it would reject Finance Minister Pravin Gorghan’s proposed sugar tax if its purpose was "simply to raise more revenue under the fig leaf of a public health benefit".

The party’s Dr Wilmot James said it had "made submissions on the proposed taxation of sugar-sweetened beverages‚ which was gazetted by the Treasury for public feedback on July 8".

The proposal was announced in Gordhan’s budget speech in February‚ and James said the "Treasury estimates that the sugar tax could add about R11bn to the fiscus".

James said a "meaningful portion of this revenue should be ring-fenced for medical research"‚ and posited that "if the tax is clearly structured to fund medical research on obesity‚ diabetes‚ hypertension and social habits that result in an increase in BMI‚ its purpose would be more defensible".

The party’s concern‚ he said‚ was job losses as a result of the tax and that it "could pose a threat to the survival of small businesses and spaza shops‚ as revenue from sweetened drinks represents a large percentage of their revenue".

READ THIS: EDITORIAL: Sugar tax must be even-handed

James said that rather than seeing the "beverage industry as an enemy of change"‚ the sugar tax should be "structured to encourage product innovation".

"This would entail a graduated tax on manufacturers that would prompt companies to innovate and develop their product range to include drinks that fall under a proposed sugar threshold that attract no additional taxes‚" he explained.

"Consideration should also be given to direct tax proceeds towards assisting schools to promote exercise and expanding the range of nutritious food and drink offerings at tuck shops."

TMG Digital