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Health Minister Dr. Zweli Mkhize says his department has previously looked at the use of alcohol and other sin taxes to help fund the country’s health sector.
Mkhize was responding in a written parliamentary question-and-answer session in which he was asked whether his department had considered an alcohol tax to fund the impact of alcohol on his department’s budget.
The impact of alcohol on the healthcare sector was highlighted in recent months as the country grappled with the coronavirus pandemic.
The Health Minister said the proposal to use alcohol taxes to finance health services is known as “allocation” and has been discussed historically, but faces obstacles with the National Treasury.
“The allocation of funds is usually legislated and would normally result in all or part of the funds being used to finance health services in general or a specific aspect of health, for example messages about the harmful effects of alcohol . This legislative mandate falls to the Minister of Finance, ”he said.
Mkhize confirmed that the Health Department has historically raised the allocation of taxes on sin, including alcohol, tobacco and sugar, as an option with the National Treasury. However, he said that the National Treasury has been reluctant to accept the proposal, citing the following reasons:
- It introduces rigidities in the budget process, limiting the availability of funds for alternative and (sometimes) more urgent purposes;
- It can lead to a waste of resources when the receiving institution or program does not plan carefully;
- When tax revenue collection is low, the dependent program will be adversely affected;
- This can result in the fragmentation of the pool and similar demands from other sectors;
- It will eventually decrease as consumption of harmful / unhealthy products decreases.
The impact of alcohol and the coronavirus
South Africa has relaxed some of its rules on the sale of alcohol under the level 1 lock; However, some restrictions remain in place on what the alcoholic beverage industry has called a ‘punch to the stomach’.
Under the country’s change to a level 1 lockdown, alcohol for home consumption can be sold between 9 a.m. and 5 p.m. Monday through Friday. Consumption will be allowed in the place subject to the observance of the evening curfew that runs from 00:00 to 04:00.
Explaining the continuing restrictions, minister of cooperative governance Nkosazana Dlamini-Zuma says the government is being cautious when it comes to opening alcohol sales in South Africa under lockdown level 1.
“Alcohol sales are restricted so that we don’t do it in a ‘bang’ and find out there are unforeseen problems like in the past,” he said.
The minister mentioned when alcohol sales first opened, low blocking level 3. She said that when that happened, trauma cases spiked, which later led to sales going back to being. temporarily prohibited.
At the time, hospitals were under heavy pressure, he said. Even though health centers are not under the same pressure now, the government was learning from the past and chose to proceed with caution.
Alcohol sales will gradually open, he said. When asked about criticism from those operating in the alcohol industry, such as wine farms, who say that weekend bans would negatively affect their businesses, Dlamini-Zuma said there were no exemptions to the regulations.
Read: The latest alcohol rules in South Africa are a ‘punch to the stomach’
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