Vantage | Why higher taxes on alcohol, sugary drinks is a good idea

In a bold move, the World Health Organisation (WHO) is urging governments worldwide to rethink their approach to taxing two kinds of beverages: alcohol and sugary drinks. Far from being a temperance reform or a farce, the WHO is backed by substantial research that indicates higher taxes on these beverages could lead to significant health benefits and increased government revenue.

Impact of taxes on consumption Research unequivocally supports the idea that taxes can effectively reduce consumption as seen with tobacco taxes. The WHO argues that similar principles should apply to alcohol and sugary drinks. Higher prices, resulting from increased taxes, are expected to push down the consumption of these beverages, thereby promoting public health. According to a study, if alcohol taxes were to increase prices by 50 per cent, it could avert 21 million deaths and generate approximately $17 trillion in additional revenue. A real-world example from Lithuania, which raised its alcohol tax in 2017, demonstrates how this approach increased tax revenue and reduced alcohol-related deaths. Similarly, taxes on sugary drinks have proven successful in reducing demand. Research cited from Berkeley, where a soda tax was implemented in 2014, showed a 20 per cent average decrease in demand for sugary drinks. After three years, soda consumption had halved and water consumption increased by 29 per cent. Saving lives and generating revenue Higher taxes on alcohol and sugary drinks are projected to save lives and bring in significant revenue. The WHO emphasises the severe health consequences associated with these beverages, contributing to 8 million deaths annually due to unhealthy diets and 2.6 million deaths from alcohol consumption. Despite the potential benefits, the average global tax rate on sugary drinks is only 6.6 per cent of the price and some European nations offer tax-free wines. The WHO acknowledges the controversy surrounding beverage taxes, with arguments ranging from the perception of punishing everyone to disproportionately affecting low-income individuals. To address concerns about fairness, the WHO points out that beverage taxes are structured to impact heavy drinkers more significantly. Those who consume responsibly would only experience a marginal increase in expenses. Moreover, evidence from Mexico’s soda tax in 2014 indicates that the tax can benefit low-income households by reducing sugary drink sales. The WHO’s call for increased taxes on alcohol and sugary drinks is rooted in a wealth of research supporting the potential for positive health outcomes and increased government revenue. While the topic remains controversial, the evidence suggests that higher taxes could indeed be a crucial step in saving lives and curbing the negative health impacts associated with excessive alcohol and sugary drink consumption. Views expressed in the above piece are personal and solely that of the author. They do not necessarily reflect Firstpost’s views. Read all the Latest News, Trending News, Cricket News, Bollywood News, India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.