Unveiling the WHO's 2025 Global Tax Reports: A Call to Action for South Africa
The World Health Organization's (WHO) 2025 Global Tax Reports have issued a stark warning: alcohol and sugar-sweetened beverage excise taxes in many countries are too low and not keeping up with inflation. This means these products are becoming steadily more affordable, potentially driving higher consumption and placing additional strain on healthcare systems. But here's where it gets controversial... The reports also highlight design gaps in sugar taxes, suggesting stronger excise regimes could push reformulation.
The WHO's findings are a wake-up call for South Africa, as the country grapples with rising rates of obesity and related health issues. The reports conclude that excise taxes on alcoholic beverages and sugar-sweetened beverages remain low in many countries and often fail to keep up with inflation, making these products increasingly affordable. As affordability increases, consumption levels rise, contributing to both communicable and non-communicable diseases and placing additional pressure on already strained healthcare systems.
The WHO highlights gaps in tax design, including the exclusion of several high-sugar beverages from sugar tax bases and limited use of automatic inflation adjustments. The organization concludes that higher excise taxes can incentivize producers to reduce the sugar content of beverages. These reports have the potential to encourage revenue authorities to adopt a more active and assertive approach as governments consider strengthening excise frameworks because of health concerns.
Corporates operating in the alcohol and beverage sectors should take note of this and prepare for possible tax increases and/or structural changes. The future of public health may depend on it.
For more information on how these reports could impact your business, contact your Baker McKenzie advisor.
Limani Mangaliso, Trainee Solicitor, has contributed to this legal update.
Explore More Insight
