20% fat tax on unhealthy food & drinks and subsidies on healthy foods

As an increasing number of countries introduce taxes on unhealthy food and drinks, Oliver Mytton and colleagues at the University of Oxford examine the evidence on the health effects of food taxes.

Taxes on unhealthy food and drinks would need to be at least 20% to have a significant effect on diet-related conditions such as obesity and heart disease. Ideally, this should be combined with subsidies on healthy foods such as fruit and vegetables.

Evidence suggests that taxing a wide range of unhealthy foods or nutrients is likely to result in greater health benefits than narrow taxes, they say, although the strongest evidence base is for tax on sugary drinks.

For example, a US study found a 35% tax on sugar sweetened drinks ($0.45 (£0.28; €0.34) per drink) in a canteen led to a 26% decline in sales.

Meanwhile modelling studies predict a 20% tax on sugary drinks in the US would reduce obesity levels by 3.5%, and suggest that extending VAT (at 17.5%) to unhealthy foods in the UK could cut up to 2,700 heart disease deaths a year.

Opinion polls from the US also put support for tax on sugary drinks at between 37% and 72%, particularly when the health benefits of the tax are emphasised.

However, they point out that understanding the overall effect on health is complicated, and that policy makers need to be wary of negative effects, like changes in other important nutrients and compensatory behaviour that may increase energy intake or reduce energy expenditure.

The food industry also argues that the taxes would be ineffective, unfair, and damage the industry leading to job losses. And from a legislative point of view, it is still unclear how such taxes are best introduced and enforced.

Meanwhile, others have advocated that the taxes be used to raise funds to treat diet related diseases, subsidise healthy foods, or to stimulate industry reformulation of food (such as removal of salt, sugar, or saturated fats from foods).

In conclusion, Mytton and colleagues say that health related food taxes have the potential to improve health, but the tax would need to be at least 20% to have a significant effect on population health.

In a second analysis paper, Corinna Hawkes from the Centre for Food Policy at City University London says that, although governments are beginning to implement food policies to encourage healthier eating, “there remains a long way to go for food policies to reach their full potential.”

She points out that changes to the food supply system since the 1980s have “coincided with rises in obesity and non-communicable diseases” and argues that health must be made a priority for the modern food economy.

Source: British Medical Journal

Dr. Anil Singhal MD

20% fat tax on unhealthy food & drinks and subsidies on healthy foods
by ( Author at Obesity2020.com )
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