The potential health and revenue effects of a tax on sugar sweetened beverages in Zambia

Abstract

The global burden of non-communicable diseases (NCDs) has been rising. A key risk factor for NCDs is obesity, which has been partly linked to consumption of sugar sweetened beverages (SSBs). A tax on SSBs is an attractive control measure to curb the rising trend in NCDs, as it has the potential to reduce consumption of SSBs. However, studies on the potential effects of SSB taxes have been concentrated in high-income countries with limited studies in low-income and middle-income countries. Using data from the 2015 Zambia Living Conditions Monitoring Survey (LCMS) data, the 2017 Zambia NCD STEPS Survey, and key parameters from the literature, we simulated the effect of a 25% SSB tax in Zambia on energy intake and the corresponding change in body mass index (BMI), obesity prevalence, deaths averted, life years gained and revenues generated using a mathematical model developed using Microsoft Excel. We conducted Monte Carlo simulations to construct 95% confidence bands and sensitivity analyses to account for uncertainties in key parameters. We found that a 25% SSB would avert 2526 deaths, though these results were not statistically significant overall. However, when broken down by gender, the tax was found to significantly avert 1133 deaths in women (95% CI 353 to 1970). The tax was found to potentially generate an additional US$5.46 million (95% CI 4.66 to 6.14) in revenue annually. We conclude that an SSB tax in Zambia has the potential to significantly decrease the amount of disability-adjusted life years lost to lifestyle-related diseases in women, highlighting important health equity outcomes. Women have higher baseline BMI and therefore are at higher risk for NCDs. In addition, an SSB tax will provide government with additional revenue which if earmarked for health could contribute to healthcare financing in Zambia.

The political economy of sugar-sweetened beverage taxation: an analysis from seven countries in sub-Saharan Africa

“…Academics were identified as being engaged in relevant policy processes in Zambia, Kenya, Namibia and Uganda as advocates and sources of policy-relevant evidence. For example, academics in Zambia had presented evidence to the Government regarding the potential benefits of an SSB tax in 2018 [35]. Government policy documents in the economic sector note that industry is a key stakeholder.…”

Contradictions within the SDGs: are sin taxes for health improvement at odds with employment and economic growth in Zambia

“…In countries where the market for SSB is small, an SSB tax is unlikely to yield much health or revenue benefits. For Zambia, the proportion of individuals consuming SSBs was estimated at 14% [25]. The proportion is much higher in a number of countries that have introduced SSB, e.g., South Africa and the Philippines.…”

“…The proportion is much higher in a number of countries that have introduced SSB, e.g., South Africa and the Philippines. It is for this reason that health and revenue benefits have been found to be modest in the Zambia [25], compared to the case of South Africa [33], or the Philippines [34].…”

“…Evidence for policy makers in Zambia on the likely effects on SSB taxes however has been lacking, with most of the literature focussed on high- and middle-income countries [13]. A modelling study at the request of the Ministry of Health showed that an excise tax could reduce consumption of SSBs, reduce obesity associated deaths, and increase revenue [25]. The study recommended that the revenue raised could be earmarked for health in light of the financing burden from NCDs.…”

“…This is because milk is tax exempt while for bottled water, the proportion of the population consuming it is very small (0.1%) [16]. Nonetheless, the 3% tax is far lower than the 25% tax recommendation by a modelling study [25]. Yet, this is a huge step in demonstrating Zambia’s commitment to curbing NCDs as key stakeholders initially indicated that the government was reluctant to adopt a sugar tax considering its possible employment and economic effects.…”