Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/316199 
Year of Publication: 
2025
Series/Report no.: 
WIDER Working Paper No. 21/25
Publisher: 
The United Nations University World Institute for Development Economics Research (UNU-WIDER), Helsinki
Abstract: 
Sin taxes are increasingly being used to discourage the consumption of goods perceived to harm individuals and society. This paper examines the impact of South Africa's Health Promotion Levy (HPL)-the first sugar tax implemented in Africa-on the consumption of sugar-sweetened beverages (SSBs) in the country. Using comprehensive data from excise returns submitted by manufacturers and importers of SSBs, we find that the HPL was extremely effective in reducing the consumption of sugar through these beverages. Within two years of its introduction, the levy caused a substantial 33 per cent reduction in the consumption of sugar through taxable beverages. We also find that the consumption partially shifted to non-taxable beverages, resulting in an increase of 15 per cent in the consumption of non-taxable SSBs. These findings suggest that while the HPL is effective in reducing SSB consumption, policy adjustments, including broader product coverage and targeted use of tax revenues, could enhance its impact.
Subjects: 
soda taxes
commodity taxation
pass-through
JEL: 
D61
D62
H21
H23
Persistent Identifier of the first edition: 
ISBN: 
978-92-9256-578-7
Document Type: 
Working Paper

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