The World Health Organization (WHO) unveiled new data indicating a global deficiency in the imposition of taxes on unhealthy products like alcohol and sugary sweetened beverages (SSBs). These findings underscore that a majority of countries are not utilising taxes to encourage healthier behaviours. In support of nations, WHO is also launching a technical manual on alcohol tax policy and administration.
Annually, 2. 6 million people succumb to alcohol-related causes, and over 8 million perish due to an unhealthy diet. Implementing taxes on alcohol and SSBs is projected to curtail these fatalities.
Interestingly, half of the countries taxing SSBs are also taxing water, a practice not endorsed by WHO. Although 108 countries impose taxes on some form of sugar-sweetened beverage, the global average excise tax, earmarked for a specific consumer product, constitutes only 6. 6% of the soda price.
At least 148 countries have implemented excise taxes on alcoholic beverages at the national level. However, wine is exempted from excise taxes in at least 22 countries, primarily in the European Region. Globally, the excise tax share in the price of the most widely sold brand of beer averages 17.
2%, while for the leading spirits type, it stands at 26. 5%. A 2017 study indicates that a 50% increase in alcohol prices through taxes could prevent over 21 million deaths over 50 years and generate nearly US$17 trillion in additional revenues—equivalent to the total government revenue of eight of the world’s largest economies in one year.
Dr. Rűdiger Krech, Director of Health Promotion at WHO, emphasised taxing unhealthy products creates healthier populations, fostering a positive ripple effect across society, diminishing disease and debilitation, and providing governments with revenue for public services. In the case of alcohol, taxes also play a role in preventing violence and road traffic injuries.
Research indicates that taxing alcohol and SSBs not only reduces the use of these products but also incentivizes companies to produce healthier alternatives. Simultaneously, taxes on these products contribute to the prevention of injuries and noncommunicable diseases, such as cancers, diabetes, and heart diseases. Currently in India, carbonated beverages, regardless of the amount of “added sugar” they contain, are subject to the highest Goods and Services Tax (GST) rate of 28%, accompanied by an additional 12% compensation cess.
This places them in the same tax bracket as other ‘demerit goods’ such as , paan masala, tobacco, and tobacco products. In this context, “added sugar” refers to sugar incorporated into beverages during the manufacturing process and does not encompass the inherent sugars derived from fruits, cereals, vegetables, and similar sources. According to WHO’s recommendations, the non-sugar content drinks can be taxed to the lowest.
WHO recommends the application of excise tax to all SSBs and alcoholic beverages. The release of the alcohol tax manual today complements an array of existing tax manuals, including those on tobacco and sugar-sweetened beverages. © 2020 Taxscan © 2020 Taxscan.