Egypt sugary drinks tax could save $1.8 billion, study finds
A model projects a 20% levy could avert diabetes, heart disease and dental decay over 25 years while easing health costs.
By Priya Raghavan · Science Reporter
3 min read
A 20% Egypt sugary drinks tax could prevent hundreds of thousands of disease cases and save about US$1.8 billion in health care costs over 25 years, according to a modeling study described by health economists Lennert Veerman and Yohani Dalugoda in The Conversation. The finding matters for a country where patients and families pay a large share of medical bills directly and noncommunicable diseases dominate mortality.
The researchers modeled a tax that would lift prices of sugar-sweetened beverages by 20%, a level they said the World Health Organization recommends as the minimum needed for a meaningful public health effect. They used a proportional multi-state life table model, which follows disease patterns through a population over time.
According to Veerman and Dalugoda, Egypt has a general 14% sales tax on all drinks and a general excise tax on nonalcoholic drinks, but no excise tax specifically aimed at sugary beverages. An excise tax is a tax applied to particular goods or services.
What would an Egypt sugary drinks tax do?
The study estimates that higher drink prices would reduce purchases, lowering sugar and calorie intake across the population. The model then links lower calorie intake to lower body weight and fewer obesity-related conditions, including type 2 diabetes, heart disease, stroke, some cancers and tooth decay.
Over 25 years, the researchers projected that a 20% tax could avert about 350,000 cases of obesity, 250,000 cases of type 2 diabetes, 56,000 cases of heart disease, 39,000 strokes, 2,700 new cancer cases and nearly 31 million cases of tooth decay.
The same analysis found the tax could add 1.6 million health-adjusted life years over the lifetime of Egypt’s current population. That measure combines longer life with better health during those years.
Why Egypt is a focus
Veerman and Dalugoda said Egypt was selected because it is one of the region’s most populous countries and already faces a heavy burden from chronic disease. They cited data showing adult obesity rising from 22% to 32% over two decades, and noncommunicable diseases accounting for 84% of deaths in the country.
They also cited research indicating that about 60 cents of every health care dollar in Egypt is paid out of pocket by patients and households. The projected US$1.8 billion in savings equals roughly 8% of Egypt’s annual health budget, according to the researchers.
The study did not count indirect costs such as lost wages or lower productivity linked to illness. Veerman and Dalugoda said including those costs would likely raise the estimated economic benefit.
Who benefits most?
The researchers reported that younger Egyptians would see the largest gains because they drink more sugary beverages and are more responsive to price changes. Women would gain slightly more than men, with about 11% more healthy life years, which the researchers linked to higher obesity rates among Egyptian women and greater sensitivity to added sugars.
The authors placed Egypt’s case in a broader African context. They cited studies linking sugary drink consumption to rising type 2 diabetes and cardiovascular disease, and noted that South Africa introduced a Health Promotion Levy on sugary drinks in 2018.
Evaluations cited by the researchers found South Africa’s levy was associated with a 32% drop in sugary drink purchases among lower-income households and a 27% decline among higher-income households. They said reductions in sugar content were larger than reductions in drink volume.
What are the study’s limits?
Veerman and Dalugoda said the model relies on international estimates of how consumers respond to price increases, rather than Egypt-specific survey data. Egyptian consumers could react differently from the populations used in those estimates.
The model also does not fully account for people switching to cheaper sugary drinks with similar sugar content. The researchers said future work should examine how results vary by income group and between urban and rural populations.
This story draws on original reporting from Medical Xpress.