Gov’t mulls more sin taxes
Lewanika Timothy | Monday October 20, 2025 06:00
The plans come as government considers alternative financing mechanisms for healthcare away from the traditional annual budget.
The draft of the National Development Plan (NDP) 12 contains proposals by government to deter excessive consumption of harmful items like alcohol and tobacco, whilst also ensuring that government has a cut of the cake in this booming industry to finance the growing healthcare budget.
The country’s fiscal planners have decried the growing healthcare budget that is saddled with a poor cost recovery mechanism and weak revenue mobilisation. Planners say this has made financing healthcare expensive, wasteful, and unsustainable.
“Botswana’s health financing remains constrained by an over-reliance on tax revenues, weak cost-recovery mechanisms, and limited revenue mobilisation,” the draft says. “This undermines the ability to ensure predictable and sustainable long-term funding for the health sector”.
The draft continues: “Key initiatives include reviewing sin taxes, equitable allocation of direct sin tax revenues fairly across priority health needs, expanded tax base (such as) introducing new sin taxes and levies to ease fiscal pressure.”
Botswana already applies levies on alcohol, tobacco, and sugary beverages, but under NDP12 the government intends to widen the base to include new categories and ensure the proceeds are more directly linked to healthcare funding.
The proposed reform comes amidst rising cases of lifestyle-related diseases, including diabetes, hypertension and heart conditions, which health experts say are linked to changing diets, physical inactivity, and excessive consumption of sugar and alcohol.
For the financial year 2025–2026, the Ministry of Health received a recurrent budget of close to P9 billion, ranking amongst the top four allocations for ministries. Most of the funds are channelled towards the procurement of healthcare supplies and treatment.
Each year, the Health ministry receives one of the highest allocations of the annual budget, but declining revenues, stubborn HIV rates, and the rising Non-Communicable Disease burden mean health authorities have increasingly been searching for more sustainable funding arrangements.
Several years ago, there was a national uproar when leaked documents showed that government was planning to reduce its funding role for those responsible for drunk driving accidents and similar incidents.
In 2021, government introduced a sugar levy, set at two thebe per gram of sugar, to discourage the consumption of sweetened beverages. Whilst the measure initially led to a drop in soft drink sales, consumption later stabilised as incomes rose and producers adjusted product sizes.
Producers have also questioned why the levy is paid at the production stage, meaning at the level of the concentrate, rather than the final product, whose sugar content is generally reduced as part of the push towards 'zero sugar' products.
Legislators began debating the draft NDP12 on Monday, and ministerial presentations are due to begin this week, before a final vote in the first week of November.