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

Peter Hangoma,Gavin Surgey

doi:10.1186/s12992-019-0510-x

Peter Hangoma, Gavin Surgey

Open Access

https://doi.org/10.1186/s12992-019-0510-x

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Abstract

BackgroundA recurring discussion in the literature relates to the possible contradictions among the Sustainable Development Goals (SDGs). The focus has been on economic goals, such as economic growth and goals related to climate change. We explore the possible contradictions that may arise between economic goals and health goals, specifically, the goal on Non-Communicable Diseases (NCDs) — SDG3.4. As a way to achieve SDG3.4, countries have been urged to introduce sin taxes, such as those on sugar. Yet others have argued that such taxes may affect employment (SDG 8.5), economic growth (SDG 8.1), and increase poverty (SDG1). However, there is limited or no reliable evidence, using actual experience, on the effect of sugar tax on health and economic outcomes. This makes it hard to assess the possible contradictions in SDGs that sugar taxes may generate.Main bodyUsing a conceptual framework on SDGs that views relationships among SDGs as either contradictory, reinforcing, or neutral, we carefully consider whether there are contradictions between SDG 3.4 on one hand and SDG 1, SDG 8.1, and SDG 8.5 on the other hand. We illustrate this using Zambia which recently introduced an equivalent 3% tax on non-alcoholic beverages, implicitly targeted at sugar-sweetened beverages (SSBs), given the stated goal of reducing NCDs. Concerns are that such a tax would be detrimental to the Zambia sugar value chain which contributes about 6% to GDP, in which case the achievement of SDG 3.4 (health) would be at odds with, or contradict, SDG 1, SDG 8.1, and SDG 8.5 (poverty eradication, economic growth, and creation of employment). We discuss that the existence of contradictions depend on a number of contextual factors, which allows us to make two conclusions about sugar taxation in Zambia. First, the current tax rate of 3% is likely neutral (no contradictions or reinforcing relationships) because it is too low to have any health or employment effects. However, the revenue raised can be reinvested to improve livelihoods. Secondly, the tax rate should be increased but care has to be exercised to ensure that the rate is not too high to generate contradictions. There will be need to carefully assess important parameters such as elasticities and explore alternative economic livelihoods.ConclusionWithout paying due consideration to important contextual factors, Zambia and many LMIC risk experiencing contradictions among SDGs.

Highlights

Conceptual framework We use a slightly modified version of the Sustainable Development Goals (SDGs) evaluation framework proposed by Singh, Cisneros-Montemayor [30]
There are three main economic benefits of a sugar tax: 1) direct tax revenue raised from the tax, which can be invested in other sectors of the economy to reduce poverty, create jobs, and enhance growth, 2) medical costs saved from treating and managing Non-Communicable Diseases (NCDs), which can be reinvested, and 3) healthier workforce creating value from averted productivity losses
There are debates on whether SDGs are internally consistent; with others arguing that they are intrinsically contradictory so that pursuing one goal would negatively affect other goals. While most of this literature has focused on economic goals, such as economic growth and goals related to climate change, we explore the possible contradictions that may arise between economic goals and the goal on health, the target on NCDs

Summary

Background

Introduction In September 2015, world leaders gathered at the United National (UN) general assembly to agree on the 2030 agenda for sustainable development, the Sustainable Development Goals (SDGs). Whether a sugar tax aimed at reducing NCDs, and achieving SDG 3.4, discourages production and consumption to the extent that the achievement of goals on ending povertySDG 1, increasing economic growth-SDG8.1, and providing decent work-SDG 8.5 are negatively affected depends on a number of contextual factors. The strategic importance of the sugar industry and the recent announcement of a sugar tax to curb NCDs makes it an interesting case study for possible trade-offs between economic and the health goals. While this is the case, it worth mentioning that sickness imposes a huge burden on the economy at both the macro- and micro-level.

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