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Monday, May 27, 2024

Sugar tax takes effect on sweetened beverages

Story by Owen Mandovha, Business Reporter

THE application of the sugar tax which has taken effect on most sugary beverages is poised to curb various non-communicable diseases and bolster national coffers.

The sugar tax which is set at US$0.1 per gram has taken effect among a host of tax measures introduced Treasury to increase government revenue.

Although having a negative impact on the growth of some industry value chains, medical practitioner Dr Hamadziripi Dube contends that the new tax is in line with global health guidelines espoused by the World Health Organisation (WHO) to curb non-communicable and chronic diseases.

“Over the years, governments across the world have been suffering under the weight of chronic ailments of NCDs in almost all age groups caused by unhealthy eating hence the measures of sugar taxes are aimed at curbing such diseases and WHO recommends governments to adopt such policy measures to ensure that the world’s population is healthier,” said Dr Dube.

Economic commentator Mr Malone Gwadi says the sugar tax creates a buffer for health care savings for governments and reduces the burden on the fiscus for health service delivery.

“This is the norm across many countries whereby governments charge these taxes which are also known as sin taxes to avert potential NCDs such as cancer diabetes and cardiovascular diseases. However, there have been instances whereby industry value chains have been affected by such including the sugar-producing industries hence government have come up with measures to strike a balance between safeguarding national health and the need to grow the economy.”

In a June 2023 discussion paper titled “Taxes on Health” by the duo of Artwell Kadungure and Rene Lowenson of the Training and Research Support Center, it is noted that by 2022, 44% of countries were now applying the sugar tax up from 22% in 2016 while consumption of sugary beverages has decreased by an average of 20%.

Treasury has promised to ring-fence the proceeds from the sugar tax to go towards capacitating public hospitals with key medical personnel such as cancer and dialysis machines.

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