Food is an ideal area for using health taxes, yet this policy approach is underutilised. While a significant number of countries today apply taxes on sugar-sweetened beverages, the number of countries that have used taxes to incentivise healthy eating is still relatively small and the scope of existing taxes is limited. Evaluations of food taxes have found evidence of reductions in sales and purchases of taxed products, and improvements in diet quality.
A new preliminary report by the Centre for Health Economics and Policy Innovation examines the rationale for health taxes on food and promotes a paradigm change in the approach to food taxes by broadening their scope, potentially targeting the entire food supply, and adopting the use of nutrient profile models as the basis for the definition of tax bases, rates, or tiers, to discriminate between foods consistently in line with their nutritional quality and health impact.
Health taxes on food can generate important revenues, reduce future health care expenditures and increase the productivity of the workforce. They should be implemented as part of a comprehensive approach to tackle unhealthy diets, obesity, and chronic non-communicable diseases, along with other policies to improve the food environments consumers are facing.