Staff Writer – The introduction of a health tax aims to discourage the consumption of goods deemed detrimental to health. Among these, the “sugar tax” stands out as a specific levy designed to curb excessive sugar intake and generate revenue for health-related expenditures.
However, the effectiveness and public perception of such taxes are significantly undermined when the collected funds are not disbursed promptly or transparently, as appears to be the case with the sugar tax.
This article delves into the concept of health taxes, the specific context of Zimbabwe’s sugar tax, and the critical implications of its delayed disbursement and how it is affecting companies in the beverage sector.
According to the Ministry of Finance, Economic Development and Investment Promotion, the government had collected USD 30.8 million from the sugar tax by November 2024 — a special tax on beverages with high sugar content. Collected revenue has reached USD 60 million in 2025. However, no funds have yet been disbursed to the Ministry of Health and Child Care.
But despite the good intention of the sugar tax, lobby groups are urging the government to urgently review the levy and align it with regional benchmarks.
Domestic manufacturers complain that the sugar content surtax imposed on beverages is stifling compliant businesses when regional rivals enjoy more favourable tax regimes.
The Zimbabwe Tax Payers Platform (ZITAP) recommends that the government cut the sugar tax rate to US$0.0005 per gramme from the current US$0.001 per gramme. ZITAP is also proposing an exemption for the first four grammes per 100ml of each beverage—a model that would align Zimbabwe with regional standards while ensuring state revenues.
Companies in the beverages subsector complain that the surtax is threatening viability.
Delta Corporation, Zimbabwe’s largest beverage manufacturer, disclosed that it paid US$4.5m in sugar tax in the quarter ended June 30, 2025, alone—almost half of what some regional competitors pay annually.
The government should reconfigure the sugar tax to ease pressure on manufacturers while promoting public health. The funds should be immediately disbursed to the Ministry of Health and Child Care to facilitate the procurement of health equipment.
Speaking at a health financing meeting, development economist Prosper Chitambara praised the government for efficient collections, but urged ring-fencing of the revenue and speedy disbursement to the Ministry of Health to fight cancer and Non-Communicable Diseases (NCDs).
“As a way of fighting against cancer… the figures certainly show that to date we have raised about US$60 million through the sugar tax, which is quite significant. But unfortunately, the funds have not yet actually been disbursed in terms of the procurement of the cancer equipment. I think that is still a major challenge,” he said.
“Because …[the sugar tax] has been created specifically to help in the fight against NCDs and in particular cancer, so it would be critical to … ring-fence that, through supporting legislation.”