How SA's sugar and alcohol taxes affect your wallet and health

The World Health Organization (WHO) is urging countries around the world to not only raise taxes on sugary drinks and alcohol but also to make sure the taxes are designed properly. Why? Because even high taxes won’t cut consumption if the rules are weak or confusing, and South Africa may be behind on some key points.

What tax design and why it matters

It’s not just about how much you charge. According to WHO, the way a tax is structured can determine whether it actually changes people’s behaviour or just brings in money for the government. Good tax design should:

• Charge based on sugar or alcohol content, not just price.
• Cover all relevant products, not just a few types of soda or alcohol.
• Adjust automatically for inflation, so the tax keeps its bite over time.
• Scale with strength for alcohol. Simply put, stronger drinks should cost more.

A well-designed tax helps people drink and eat less sugar or alcohol while still raising money for public health.

How does South Africa do it?

Sugary drinks

South Africa introduced the Health Promotion Levy in 2018.

What is noteworthy is that it is based on how much sugar is in the drink, rather than the drink’s price. Drinks with more than 4 grams of sugar per 100 ml get taxed. Some drinks, like certain fruit juices and milk drinks, are not taxed.

The tax doesn’t automatically increase with inflation, which means over time it becomes less effective.

Alcohol

Taxes on alcohol vary. Spirits are taxed by the litre of pure alcohol and beer and wine are taxed by volume.

Cheaper, high-alcohol drinks may still be relatively affordable. Like sugary drinks, the tax doesn’t adjust automatically with inflation, and there’s no minimum pricing in place.

Where South Africa aligns and where it falls short

When measured against the World Health Organization’s tax design principles, South Africa only partly complies.

The country does tax sugary drinks based on sugar content and taxes some alcohol according to alcohol strength. Both of these align with WHO’s recommendation to charge by harmful content rather than just price.

However, coverage remains incomplete, with certain products still falling outside the net. These taxes are not automatically adjusted for inflation, which weakens their impact over time.

There is also no minimum pricing policy to stop very cheap, high-sugar or high-alcohol products from flooding the market. In short, while the framework exists, key gaps mean the system may not be working as effectively as it could.

South Africa has a smart system for sugar, but gaps remain, especially for alcohol and for keeping taxes strong over time.

Why it matters to everyday people

WHO points out that badly designed taxes may raise money but won’t reduce sugar or alcohol consumption. On the other hand, well-designed taxes can help reduce obesity, diabetes, and alcohol-related harm, provide governments with a steady stream of revenue to invest in health programs, and make unhealthy products less affordable, which could encourage healthier choices.

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