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World Health Organisation Backs Sugary Drinks Taxes

by Ulrika Lomas, Tax-News.com, Brussels

13 October 2016


The World Health Organisation (WHO) has said that taxing sugary drinks can lead to lower consumption and help to reduce obesity, type-two diabetes, and tooth decay.

In a new report, "Fiscal policies for Diet and Prevention of Noncommunicable Diseases (NCDs)," the WHO argued that fiscal policies that lead to at least a 20 percent increase in the retail price of sugary drinks would result in proportional reductions in consumption.

The report stated: "Consistent with the evidence on tobacco taxes, specific excise taxes – as opposed to sales or other taxes – based on a percentage of retail price, are likely to be most effective. In countries with strong tax administration, taxes that are calculated based on nutrient content can have greater impact." It explained that excise taxes reduce incentives for consumers to switch to cheaper options, as they increase the price of all products affected by the tax in the same way.

The report added that earmarking some or all of the revenues for efforts to improve the health care system, encourage healthier diets, and increase physical activity, may increase public support. It stressed that policy coherence is needed to ensure the maximum impact of any "sugar tax."

Dr Douglas Bettcher, Director of the WHO's Department for the Prevention of NCDs, said: "If governments tax products like sugary drinks, they can reduce suffering and save lives. They can also cut health costs and increase revenues to invest in health services."

According to the WHO, in 2014 more than one in three adults worldwide was overweight. An estimated 42 million children aged under five years were classed as overweight or obese in 2015, an increase of about 11 million in the past 15 years.

TAGS: tax | Health tax | food | health care | tax reform | retail | International Organisation | services

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