The World Health Organisation (WHO) has called on governments to significantly increase taxes on sugary drinks and alcoholic beverages, warning that weak tax systems are keeping health-harming products cheap while fuelling preventable diseases.
In two global reports released last week, WHO said persistently low tax rates are driving rising cases of obesity, diabetes, heart disease, cancers and injuries, with children and young adults among the most affected.
The UN health agency noted that the global market for sugary drinks and alcoholic beverages generates billions of dollars in profits each year, yet governments capture only a small share through health-motivated taxes. As a result, societies are left to shoulder the long-term health and economic costs linked to non-communicable diseases and alcohol-related harm.
The reports show that at least 116 countries tax sugary drinks, mainly sodas, but many high-sugar products such as 100% fruit juices, sweetened milk drinks and ready-to-drink coffees and teas, remain untaxed. While 97% of countries levy taxes on energy drinks, WHO noted that this figure has not changed since 2023, pointing to stalled progress.
On alcohol, WHO found that at least 167 countries impose taxes, yet alcoholic beverages have become more affordable in most countries since 2022. This trend is largely due to tax rates failing to keep pace with inflation and income growth. Wine remains untaxed in at least 25 countries, most of them in Europe, despite well-documented health risks.
In Zimbabwe, the WHO recommendations come as debate continues over the role of health taxes in financing the public health system and addressing the growing burden of preventable diseases.
Against a ZiG 288 billion national revenue target for 2026, sugar and alcohol taxes are viewed as a targeted policy tool rather than a major revenue stream. They are estimated to generate between US$60 million and US$80 million annually, less than 1% of total government revenue, but are considered significant for the Ministry of Health and the proposed National Health Insurance scheme.
Economist Stevenson Dlamini said health taxes provide a strategic link between consumption, disease prevention and healthcare financing.
“By taxing sugar and alcohol, the government is essentially creating a self-funding mechanism for the healthcare system. It’s a way to capture value from a multi-billion-dollar beverage industry and reinvest it directly into public hospitals,” Dlamini said.
He added that the long-term value of such taxes lies in prevention rather than revenue growth.
“Every dollar collected from a sugar tax is preventative revenue. It reduces the long-term strain on the fiscus by lowering the future bill for diabetes and heart disease. It’s a rare case where the government wins even if the revenue goes down, because that would mean people are actually getting healthier,” he said.
However, Dlamini cautioned that health taxes can have unintended social consequences if not carefully designed.
“For low-income households that spend a large share of their income on food and beverages, even modest price increases can reduce disposable income for essentials like school fees or nutritious food, making these taxes regressive in the short term,” he said.
Dlamini further warned that enforcement challenges could undermine the effectiveness of health taxes.
“As prices rise in the formal market, people do not necessarily stop consuming; many shift to untaxed and unregulated products in the informal economy. This substitution effect means the state loses revenue while consumers face even greater health risks from backyard brews and smuggled drinks,” he said.
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