Colombia: why a soft drinks tax is not the solution

Colombia: why a soft drinks tax is not the solution

In view of the possible introduction of a tax on soft drinks in Colombia, the newspaper El Nuevo Día interviewed the executive director of the ANDI Chamber of the Beverage Industry, Santiago López Jaramillo. The tax proposal is currently being discussed by an experts committee and will be submitted to the congress by the end of the year, although, according to López Jaramillo, the Minister of Health already requested an analysis of the potential impact of the soft drinks tax, and neither the commission of tax experts set up for the task, nor the OECD recommended it.

López Jaramillo pointed out that the people most affected by the introduction of a tax would be the lower income households, which spend a greater share of their resources on soft drinks; such an impact is of great concern especially in those rural areas where bottled drinks constitute the sole reliable source of potable water.

The negative impact goes beyond that on consumers, according to López Jaramillo the 37% of income revenue for 600 thousands Colombian families depends on the sales of soft drinks. The risk is to repeat what Mexico experienced, where 30 thousand shops closed and 10’800 jobs were lost following the introduction of a soft drinks tax. The emblematic case of Denmark is also mentioned, where a similar levy was dismantled 15 months after its introductions, as it failed to meet its health targets, while at the same time it impacted negatively the economy.

Asked about the positive effect of the tax on people’s health López Jaramillo replied that it was paradoxical that the suggested measure is the one that failed when implemented in other countries. The root of Colombian health problems lies in the population lifestyles, as Colombia is the second most sedentary country worldwide according to the WHO, he said.

 

The full article from El Nuevo Día can be found here