A well being tax of between 20% to 30% along with GST may be thought-about to be imposed on sugar, sugar sweetened drinks (SSBs) like colas and juices in addition to meals excessive in sugar, salt and fats (HFSS), public well being researchers have really helpful in a research printed in Journal of Health Policy and Planning.

The advice is an end result of a UNICEF-funded undertaking, and the authors hope that this research together with others will affect insurance policies aimed to scale back consumption of sugar and associated merchandise. Niti Aayog is inquisitive about understanding the affect of imposing well being taxes and warning labels on meals merchandise for encouraging wholesome consuming practices in Indian customers.

Dr Beena Varghese, well being economist and advisor, WHO and a co-author of the research tells The Hindu that the research doesn’t advocate taxing households on buy of their common ration of sugar. “The study insists that bulk consumers of sugar such as confectionery and sweet manufacturers may be taxed which may reduce their demand for sugar. When the higher costs are transferred to consumers, demand for such products is expected to reduce,” Dr Varghese says. 

For the aim of the research, sugar is outlined as all types of refined and unrefined sugar and gur (brown cane sugar), sugar utilized by bulk producers for all unbranded and unlabelled sweets and confectionaries.

According to Ministry of Consumer Affairs, Food and Public Distribution information, confectionery producers buy as much as 55% of annual sugar produced in India. “We estimate that manufacturers may be more sensitive to prices of sugar than a household that purchases smaller quantities as a part of their essential food basket,” Dr Varghese says.

Currently sugar is taxed at 18% GST, if an extra 20-30% tax is imposed, it will take the tax to 38-48%. Researchers have utilized the metric of ‘Price Elasticity’ to find out if there will probably be any discount in demand if costs of the product went up. “Sugar is a widely used product, so on studying price and demand for sugar over years from datasets available between 1984-85 to 2011-2012 of Private Final Consumption Expenditure and Consumer Price Index, we estimate that if the price of sugar is increased by 10%, demand for sugar will be reduced by 2% with all other factors driving the demand remaining constant. 

“However, for manufacturers of sweets and confectionaries, who buy sugar in bulk we are estimating a higher price elasticity, so by imposing an additional 30% tax to 18% GST, we estimate that there could be a 13-18% decrease in demand for sugar,” Dr Varghese says. 

For sugar sweetened drinks, a well being tax of 10-30% may end in 7-30% decline in demand, whereas 10-30% well being tax for HFSS merchandise would end in 5-24% decline in demand. 

Researchers additionally famous that further taxes would improve tax revenues for the federal government by 12-200% throughout totally different situations. Different merchandise are presently taxed in a different way. While sugar presently attracts 18% GST, sugar sweetened drinks appeal to 28% GST and a 12% further cess, whereas excessive fats, salt and sugar merchandise solely appeal to 12% GST. 

“Taxing unhealthy foods more is likely to reduce demand, while increasing government revenues for reinvestment back into public health programmes and policies that may reduce obesity and the incidence of non-communicable diseases in India,” says Dr Varghese.

India is the most important shopper of sugar on the earth, the paper notes. “Global average consumption of sugar is 22 kg per person per year, an average Indian consumes 25 kg per year which includes regular sugar, free sugar from sugar sweetened beverages, traditional sources like jaggery, which is five times the WHO recommended threshold for free sugar intake,” the paper says. India is dealing with a sugar epidemic with an increase in sale of aerated drinks by 22.5% and an increase in all gentle drinks by 24.8% from 2016 to 2019. Also, HFSS meals merchandise account for 10-30% of common complete caloric consumption in rural and concrete households respectively, the paper notes. 

Imposing well being tax on sugar and associated merchandise may also help management weight problems, tooth decay, danger of sort 2 diabetes, heart problems and sure cancers. Researchers say that if folks proceed to devour sugar sweetened drinks year-on-year the chubby and weight problems prevalence is anticipated to rise from 39% to 49% from 2014 to 2023 and kind 2 diabetes incidence is anticipated to rise from 319 to 336 per 1,00,000 in the identical interval. 

Tax fee is tied to the quantity of sugars and producers are inspired to reformulate and scale back the quantity of sugar in drinks. “We have recommended taxing artificial sweeteners and other sugar replacements in the similar vein so that manufacturers do not look for cheaper alternatives,” she says.

Up to 70 nations have imposed a well being tax on sugar, SSBs and HFSS together with Mexico, Chile, Saudi Arabia, Argentina and South Africa. In Mexico, taxation on SSBs decreased consumption of taxed drinks (and elevated buy of bottled water) within the first 12 months of implementation and diminished imply BMI in youthful age teams.