The Case for an Increased Tax on Alcohol in South Africa

While many South Africans either consume alcohol in moderation or do not drink at all, a large proportion of current drinkers consume alcohol at risky levels. Drinking to intoxication is common in South Africa. According to the National Demographic and Health Survey of 1998, almost a third of male and female current drinkers consume alcohol at risky levels *(4) over weekends (Parry, 2000). The misuse of alcohol potentially places a heavy burden on the health, welfare, and private economic sectors of the country. International research has demonstrated that for the health sector, direct and indirect costs arise from alcohol abuse due to the costs of substance abuse treatment, the increased use of emergency services due to alcohol-related trauma, the increased use of mental health services due to alcohol-related psychiatric problems, and the overuse of medical services due to alcohol-related medical complications (Mauser & Van Stele, 1994; Xie et al., 1999). There is also a deadweight loss arising from raising tax revenue to pay for these increased uses of government services.