Concerns over lifestyle-related non-communicable diseases (NCDs) and associated risk factors have led to greater government interest in the use of selective food and non-alcoholic beverages taxes (SFBTs). Analysis of the literature shows that the imposition of SFBTs does not represent best tax practice and is unlikely to raise significant overall government revenue or to address public health issues. Some key insights from the study:
- “This paper finds weak evidence in the available academic literature in support of SFBTs as measures to raise significant overall government revenue or to address public health concerns with regard to non-communicable diseases (NCDs) and their associated risk factors”.
- “The direct evidence to support the introduction of an SFBT to combat NCDs and their associated risk factors is also weak. How consumer behavior changes in light of relative price changes is not always obvious, making it very difficult to model and predict in a robust manner. Consumers may switch to lower-cost brands that have the same or similar characteristics in terms of sugar, salt or fat content to the originally purchased item, or buy alternative products”.
- “[…] the overall impact on consumption of products subject to SFBTs may be negligible, in which case the impact of the tax in encouraging more healthful outcomes would also be negligible”.
You can find the whole paper here under the ‘Highlights’ section.