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OPINION

SUGAR TAX NOT

By: Jasson Urbach, EFFECTIVE IN

director of the Free Market
Foundation and head of its
Health Policy Unit ADDRESSING OBESITY

On 1 April, government decided to the price of petrol and the so-called caused by their policies.
re-introduce a tax on sugary drinks ‘sin taxes’ that are levied mainly on
calling it the “health promotion levy”. alcohol and tobacco products. Lowering obesity rates is not an
The “new” tax, Treasury claims, is impossible goal. The ability of some
not a revenue raising mechanism but What governments the world over fail previously obese individuals to adjust
rather a genuine attempt to address to recognise is that what people do their behaviour and lifestyles to
South Africa’s rising rate of obesity. with their own bodies is none of the attain a healthy weight is testimony
Putting aside the fact that the “health state’s business. Imposing a soft tax to this. Tackling obesity needs to be
promotion levy” is only targeted at on sugary drinks is a blunt instrument more personalised to accommodate
sugary drinks and is therefore clearly that besides undermining consumers’ vast metabolic diversity and
discriminatory and arbitrary, it has individual liberties and treating adults differing circumstances. Individual
not been ring-fenced, which raises like children, will not result in any empowerment, education and small-
an interesting dilemma. If, as the perceptible difference to obesity scale personal or community-led
Treasury claims, it is not a revenue rates. efforts would be more effective than
raising scheme, then another tax punishing taxes and manipulative
should have been reduced or done Urbanisation, an abundance of social engineering. Government
away with. Instead, what we have is easily available calories, and intervention should be resisted,
an increase in VAT, a regressive tax modern lifestyles with few physical and people allowed to find tailored
that disproportionately affects the demands make it easy for people to solutions that best meet their unique
poor and a significantly higher tax-to- store surplus energy. Governments needs.
GDP ratio. The government’s coffers cannot change these circumstances
now may be slightly healthier as a without resorting to North Korean- Ultimately, better health outcomes
result, but consumers – particularly style famine-inducing dictatorships. can only be achieved by consumers
low-income individuals – are worse Energy intake is just one of the many taking charge of their own lives.
off because of this insatiable appetite factors that require consideration. A more durable strategy would be
of government to tax South Africa’s The way people eat, drink and move to educate individuals about the
citizens has changed dramatically in the past benefits of a balanced, nutrient-
few decades. rich diet. There can be no disputing
Broadly speaking there are two types the fact that a wealthier nation is a
of taxes: direct and indirect taxes. Other factors influencing obesity healthier nation. However, taxing a
Direct taxes, such as personal and are highly complex and include nation is a sure way to reduce the
company taxes, are paid directly the food environment, types wealth of citizens and prevent them
to government. Indirect taxes are of food consumption, physical from being able to afford making
collected on behalf of the government activity, individual psychology, healthier food choices.
by intermediaries, such as retail societal influences, genetics and
outlets, and paid over to government multiple biological responses. The The tax on sugary drinks further
in due course. The most common individuality and complexity of erodes our personal freedoms.
example of indirect taxation is VAT. human response is part of the reason Yesterday, the target was tobacco
Most indirect taxes are stealthily why government interventions fail. and alcohol, today it is aimed at
applied to only certain goods and Tax legislation, subsidies, dietary sugary drinks, tomorrow it could
services to the extent that some guidelines and food labelling be sweets, chocolates and artificial
people are not even aware that their requirements cannot be tailored sweeteners. The range will only
purchases of these goods include to suit individual circumstances. get wider and wider and in time
tax. These taxes are typically referred Reductionist approaches to weight government-imposed restrictions
to as ‘soft taxes’ because they can loss are ineffective on a population- may very well encompass minimum
be easily imposed by government wide scale and will only result amounts of exercise and how
without the public knowing anything in unintended consequences. long you should be out in the sun.
about them. Prime examples are fuel Governments should not assume Choices will no longer be yours to
levies that constitute almost 40% of there will be negligible or no harm make – all in the name of your health.

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