According to the draft law, adding sugary soft drinks to the list of subjects subject to special consumption tax aims to prevent and reduce the alarming situation of overweight and obesity in children; high risk for many non-communicable diseases, chronic diseases and premature death. So what is the international experience in this issue?
In many countries that impose taxes, the rate of overweight and obesity continues to increase.
Currently, about 45 countries (less than a quarter of the world's countries) apply excise taxes on sugary drinks, but research in many countries that have applied them shows that this tax policy is ineffective in reducing overweight and obesity rates or adjusting consumer behavior due to the substitution effect, while having negative impacts on the economy and employment. In early 2023, the World Health Organization (WHO) updated its list of the most cost-effective interventions to address non-communicable diseases (Best Buys), but the measure of imposing a tax on sugary drinks is still not on this list of most effective interventions.
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Chile, Mexico, India, Belgium, Finland, Latvia and Brunei are good examples. Chile introduced an excise tax on sugary drinks in 2014, but by 2016-2017, the rate of overweight and obesity in the country had increased steadily, from 19.2% to 30.3% for men and from 30.7% to 38.4% for women.
Similarly, in Mexico, after 2 years of tax imposition, sugary beverage consumption in Mexico tended to increase again, while the rate of overweight and obesity in both adults and children in this country continued to increase continuously in the period 2012-2021, increasing from 69% to 70% for men; women increased from 73% to 75%; children increased the fastest from 35% to 43%. In Latvia, before the tax was imposed, the obesity rate in adult men was 11.5% and in women was 19%, but after 15 years of tax imposition, the obesity rate in both men and women continued to increase, respectively, to 19.6% and 25.7%. In Belgium, in 2014, the obesity rate in men was 13.9% and in women was 14.2%, but by 2019, the rate in men was 17.2% and in women was 15.6%.
In middle-income countries, the 2016 Systematic Review of the Effectiveness of Sugary Beverage Taxes in These Countries found no evidence that sugary beverage taxes have resulted in a sustained reduction in overweight. Several countries have abolished excise taxes on sugary beverages because they have not resulted in any significant improvements in public health, while having negative impacts on local economies and employment.
A study conducted by the European Commission showed that taxing foods or drinks high in fat, sugar or salt in some European Union countries leads to increased administrative costs, unemployment in some countries, higher food costs, and no significant improvement in public health. Denmark is a typical example. Denmark was the pioneer in imposing a tax on sugary drinks in Europe in the 1930s. After a long period of implementation without realizing the effectiveness, the Danish government had to gradually remove it in two stages with a 50% reduction from July 1, 2013 and a complete removal from January 1, 2014. The Danish government recognized the irrationality of the policy because people would buy products from neighboring countries while greatly affecting the local economy and employment. The Danish government's move to abolish the tax was aimed at facilitating economic growth and job creation in Denmark. Despite the abolition of the tax, obesity rates in Denmark have remained at a healthy level. Several US states have also abolished the tax shortly after it was passed. For example, Cook County, Illinois, abolished the tax less than a year after it was passed. California even passed a bill in June 2018 that would prevent any city from imposing a tax on beverages or food for the next 12 years.
Why many countries do not impose taxes on sugary drinks
Japan does not apply a tax policy on sugary soft drinks but still controls the overweight and obesity situation well. In Japan, although the soft drink consumption rate is much higher than in Vietnam (116kg/person/year), the obesity rate in this country is only 3.5% due to the promotion of healthy diets and effortsto educate the community. Japan has established two laws, Shuku Iku and Metabo, which regulate the process of building healthy menus in schools and conducting nutrition lectures for students. This law also requires companies to provide breaks for employees to exercise, and encourages employees to participate in physical activities after work.
In Singapore, 11% of Singaporeans are obese, 30% are overweight, 10% have diabetes and the rate is increasing. However, the Singapore Government has not chosen to impose a tax on sugary drinks because it does not consider it an effective measure to address public health issues. Instead, a more comprehensive approach has been adopted, including increased physical activity as well as public education on healthy and balanced diets.
Germany also has dietary and physical activity guidelines in place. New Zealand has not. The New Zealand Institute of Economic Research conducted a study called “Sugar Taxes: Assessing the Evidence,” in which researchers found that “there is little evidence that sugar taxes improve health outcomes.”
Source: https://www.qdnd.vn/kinh-te/cac-van-de/thue-tieu-thu-dac-biet-doi-voi-nuoc-giai-khat-co-duong-nhin-tu-kinh-nghiem-quoc-te-735917
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