The decision of Kerala’s communist government to impose a 14.5 per cent ‘fat tax’ does not appear to be well thought out. If the idea is to curb consumption of ‘junk’ food such as burgers, pizzas, doughnuts and sandwiches, then taxation is not the tool to do this as many countries have discovered. If raising additional revenues is the objective, the tax fails that test too as it is projected to bring in a piffling ₹10 crore. Kerala is not the first government to introduce a ‘sin tax’. Similar taxes exist in many US states and countries such as Denmark and Hungary. In 2011, Denmark decided to tax saturated fat products, a move many felt would revolutionise public health policy, but the levy was withdrawn about a year later as it was found that the move cost jobs and, more importantly, didn’t have the desired impact on the consumption of unhealthy food.
The impact of fat or sin taxes on public health is a matter of debate. While regulators argue that they help cut consumption, industry and several analysts cite the impact on economy in terms of job loss and revenue fall, and public policy experts suggest that taxes alone cannot fight obesity. Interestingly, a study by researchers from the University of Pennsylvania found that even a 100-per cent tax on junk food would reduce the overall US population’s body mass index (BMI) by less than 1 per cent. This means that the fiscal tool should be just one of the means to tackle obesity, which the UN terms a health threat as big as tobacco.
The fact is that Kerala has the second largest population of overweight people in India, behind Punjab, and given the umbilical link between junk food and obesity, any attempt at reining in consumption of bad food should be welcome. According to the National Family Health Survey 2005-06, nearly 18 per cent of men and 28 per cent of women in the State have a BMI above 25. But the issue here is the means adopted, not the principle itself. For starters, there is the question of defining what constitutes junk food. The State is known for its myriad varieties of snacks, most of which easily meet the eligibility criteria for junk food. So, restricting the tax only to branded restaurants seems arbitrary and biased. Kerala’s unregulated street food poses a bigger threat to public health than branded junk food. Equally important is the concern over the State’s right to intervene in people’s food habits. Public health interventions should ideally follow three steps: education, regulation and fiscal measures. Creating awareness about the use and effects of junk food is the most important and politically correct step, which may be followed by regulatory measures and, finally, wielding the taxation weapon. Jumping to the final step while ignoring the first two is unlikely to do much good in the battle against the bulge and might even boomerang on the consumerist State’s economy.