Tax likely to hike price of beverages, may help check obesity, Type-2 diabetes
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NEW research says that if a tax of 20 per cent is levied on
sugar-sweetened beverages (SSBs), like soft drinks, it can help reduce
obesity and diabetes. The study was published on January 7, 2014, in the
journal PLoS Medicine. Such a measure, if put in place, could save 3.9
million Indian youth (25-44 year olds) from becoming overweight and
prevent Type-2 diabetes in 400,000 people in the country from 2014-2023,
says the study led by Sanjay Basu of Cardiovascular Institute, Stanford
University, US.
The study estimates that a tax of 20 per cent on sweetened beverages
could prevent the problems of obesity and overweight in India by three
per cent and reduce diabetes by 1.6 per cent in the next decade.
According to the World Health Organization (WHO), nearly 13 per cent
Indians are overweight or obese. WHO also says that India is presently
home to 62 million diabetics, and by 2030, the figure is expected to be
79 million, much more than expected in America (30 million) and China
(42 million) within the same period. Diabetes is responsible for two per
cent of all deaths in India on an average. Reducing non-communicable
diseases, especially diabetes and obesity, is therefore crucial to the
country.
Source: PLoS MedicineDoing
this through taxing harmful and unhealthy products has been debated for
a long time across the globe. The logic behind SSB tax, or “fat tax”
when levied on food items that make one fat, is simple: taxes increase
prices, which in turn decreases consumption, thereby reducing the risk
of obesity, diabetes and other diseases. Denmark and New York have used
this method to make an effort to shift from an unhealthy diet pattern to
a healthy one. Denmark increased excise duties on chocolate, ice cream,
sugary drinks and confectionary by 25 per cent in 2010 and introduced
tax on foods containing more than 2.3 per cent saturated fat, such as
meat, cheese, butter and edible oil, in 2011.
“It is an effective method. The idea is to increase prices of
unhealthy food through taxation and use that money to subsidise healthy
foods like fruit and vegetables,” says Monika Arora, head of health
promotion and tobacco control at the Public Health Foundation of India.
The health effects of fat tax are yet to be confirmed, although there
has been overwhelming evidence about the positive effect of increased
tobacco prices. According to Dehran Swart from the National Council
against Smoking in South Africa, high taxation on cigarettes has reduced
smoking in the country by about 50 per cent in the past two decades.
Some Indian states, too, have levied high duty on tobacco. In 2013,
Rajasthan increased value added taxes on all tobacco products from 50
per cent to 65 per cent, while Jammu and Kashmir increased it from 30
per cent to 40 per cent in the same year.
Marion Nestle, professor in the department of nutrition, food studies
and public health, New York University, US, believes that taxation is
an approach worth trying. “Numerous studies in the US show that adults
and children who habitually consume sweetened beverages have poorer
diets, gain more weight and are fatter than those who do not. She
further adds, “Food choices are price-sensitive. In many countries,
sweetened beverages are cheaper than bottled water. Raising the price
should discourage such consumption.” She, however, advises caution
against over-enthusiasm as “this approach is new and its effects are yet
to be seen.”
A perspective paper published in the same issue of PLoS Medicine has
appreciated the study, but says that the validity of the proposed
estimate will depend on how much tax manufacturers and retailers pass on
to the consumer. If they do not increase the price of sweetened
beverages significantly, then the proposed level of taxation will not
help, the paper explains.
