South Africa Doesn't Need a Bigger Sugar Tax. It Needs to Account for the One It Has.

CAPE TOWN, SOUTH AFRICA — Ahead of South Africa's 2026 Budget Speech, the Foundation for Consumer Freedom Advancement (FCFA) is calling on the National Treasury and the Department of Health to resist the campaign to raise the Health Promotion Levy to 20%, and instead account for what the existing levy has actually delivered.

The HPL has been in place since 2018. It collected R2.26 billion in FY2021/22 alone. By the Department of Health's own admission, only a small fraction of that revenue has reached the health programmes the levy was meant to fund. South African consumers were promised a tax that would protect their health. They got a tax that protects the fiscus.

"The argument for raising the HPL skips the question that matters most to South African consumers. Where did the money go? Until that question is answered, raising the rate just deepens the cost on households without a clear health return. South Africans paying more at the till every time they buy a cooldrink deserve to see the health programmes that money was supposed to build."

— Olumayowa Okediran, Founder of the Foundation for Consumer Freedom Advancement

A Tax That Hits the Poor Hardest

Consumption taxes on everyday products fall hardest on lower-income households, who spend a larger share of their income on the goods being taxed. South Africa's HPL is no exception. A 20% rate would not change which households carry the burden. It would only make the burden bigger.

A Better Conversation

FCFA's position is simple. South Africa should publish a full audit of HPL revenue collection and disbursement since 2018, identify the specific health programmes that received those funds, and make the connection between consumer cost and public health benefit visible to the people paying the tax. That conversation has to happen before any rate increase is on the table.