The taxation of sugar-sweetened beverages (SSBs) has been brought to the forefront as a key public health intervention strategy amidst the global health crisis. The SSB taxation is endorsed by the World Health Organisation (WHO) and the United Nations Children’s Fund (UNICEF) and is hailed as a “best buy” policy to curb the proliferation of certain health issues. The implementation of such a tax could be a critical step towards fostering a healthier population in Zimbabwe. This article explores the various facets of SSB taxation, its objectives, effectiveness, and the unique context of Zimbabwe’s current tax policy.
A tax on sugar-sweetened beverages discourages their purchase and consumption. There has been a decline in SSB consumption in countries that have adopted such taxes. A crucial aim of SSB taxation is to nudge consumers towards healthier alternatives. Beyond economic impacts, SSB taxation strives to reshape societal norms and perceptions. It serves as a potent indicator that regular consumption of sugary drinks does not align with a healthy diet. Reducing sugar intake is essential for combating obesity, type 2 diabetes, and heart diseases. Lower SSB consumption, driven by taxation, is expected to decrease overall sugar intake, leading to improved public health and reduced healthcare costs. The revenue generated from SSB taxes can significantly boost public health initiatives. It enables governments to invest in health education, obesity prevention, and healthcare infrastructure, creating a cycle of health investment.
Further to the above, the design of the SSB tax is significant. Analysing how it can be highly effective is important. In addition to the high tax rate on SSB’s, for the sugar tax policy to be effective, it must clearly define the tax incidence and the range of products it targets. To be highly effective, it is ideal that a wide range of beverages containing free sugars and artificial sweeteners, including carbonated drinks, fruit juices, energy drinks, and flavoured milk should be subject to the tax. This inclusive approach prevents consumers from simply switching to untaxed sugary alternatives. The tax rate is pivotal in altering consumer behaviour. A consensus among health experts suggests that a minimum 20% tax is necessary to effectively deter consumption of high-sugar beverages. This rate is deemed sufficient to prompt a noticeable change in purchasing habits. A tiered tax system, where rates vary according to sugar content, is increasingly favoured. It penalizes higher sugar content more heavily, thus providing a stronger disincentive against consuming such drinks. This method also encourages manufacturers to reformulate their products to lower sugar levels. The policy must be transparent in its objectives and the products it targets, ensuring there’s no confusion among consumers and manufacturers. Additionally, the tax structure should be equitable, avoiding any bias towards domestic or international products to prevent trade disputes.
It is apparent that Zimbabwe’s has adopted a conservative approach to SSB taxation which is contrast with international practices, which have demonstrated the effectiveness of higher tax rates in achieving public health objectives without severely disrupting the market. Other countries implementing higher sugar taxes have seen more success in reducing sugary beverage consumption and encouraging healthier lifestyles. It would thus be an arguable consideration that Zimbabwe should consider aligning its tax rate with global standards to enhance the effectiveness of its sugar policy. Such an approach should be accompanied by comprehensive policy measures, including public education, subsidies for healthy alternatives, and safeguards for the beverage industry and employment. If well implemented, these measures would support the transition to healthier alternatives and enhance public understanding of the policy’s health benefits and revenue collection aim.
Unfortunately, Zimbabwe cannot be quick to introduce a high SSB tax. The general design of an SSB tax depends on a number of factors. Zimbabwe has different economic factors from first world countries who have successfully introduced the SSB tax and increased the rate to 20%. As such, the government policy of attracting investment and developing industry should be balanced with the policy’s health benefits and revenue collection to fund the health sector. Although well intentioned, the introduction of the SSB tax may potentially shrink or destroy the beverage industry. Industry is still attempting to reboot after an economic turmoil which the country faced in 2008 and the years after characterised by currency issues. Also, the government has recently introduced many tax changes which have shocked the business sector. Thus, although 20% is the recommended rate to discourage the consumption of SSB’s, the affected industry needs an opportunity to recover from the many economic shocks, including in tax policy.
Engaging with a diverse range of stakeholders is crucial for a transparent policy development process. It helps in addressing potential conflicts of interest. The successful implementation of SSB taxes in Zimbabwe requires a multifaceted approach. This includes clear policy design, stakeholder consultation, cross-sector support, and continuous monitoring and evaluation. Informed by global practices and adapted to local contexts, these strategies can help Zimbabwe achieve its health and economic objectives through SSB taxation.