New WHO 2025 reports warn that alcohol and sugar sweetened beverage excise taxes in many countries are too low and not keeping up with inflation, making these products, in the view of the WHO, steadily more affordable and potentially driving higher consumption and added strain on healthcare systems. They also highlight design gaps in sugar taxes and suggest stronger excise regimes could push reformulation.

The World Health Organization (WHO) has released its Global Report on the Use of Alcohol Taxes, 2025 and Global Report on the Use of Sugar Sweetened Beverage Taxes, 2025. Broadly, the  reports conclude that excise taxes on alcoholic beverages and sugar sweetened beverages remain low in many countries and, in the view of the WHO, often fail to keep up with inflation, making these products increasingly affordable. The WHO concludes that as affordability increases, consumption levels rise, contributing to both communicable and non-communicable diseases and placing additional pressure on already strained healthcare systems.

The WHO highlights gaps in tax design, including the exclusion of several high sugar beverages from sugar tax bases and limited use of automatic inflation adjustments, concluding that higher excise taxes can incentivise producers to reduce the sugar content of beverages.

These reports have the potential to encourage revenue authorities to adopt a more active and assertive approach as governments consider strengthening excise frameworks because of health concerns.

Corporates operating in the alcohol and beverage sectors should take note of this and prepare for possible tax increases and/or structural changes.

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Limani Mangaliso, Trainee Solicitor, has contributed to this legal update.