Sugar-coat this tax

S Murlidharan | Updated on May 10, 2018

Sugar cess must be levied as a health tax


The GST Council has chosen not to rock the boat and decided to defer sugar cess till a possible consensus is reached. While the Finance Ministry’s rationale for it was to shore up the prices in a falling market, in Qatar, the government recently hiked taxes on sugar substantially on more altruistic grounds — discouraging its unbridled and unrestrained consumption.

People of Qatar seem to have a sweet tooth but that dangerous proclivity has turned out to be life threatening. A 2012 report showed that Qatar was one of the fattest countries on earth with a staggering half of all adults being classified as obese and 17 per cent of the population suffering from diabetes.

In 2012, the broad decision was to tax junk food heavily and reserve severest tax treatment for more harmful of the food and beverages. Sugar naturally came for a heavy tax next. It happened in early 2018.

While the Qatar government did not mince words and camouflage the tax, the Indian government perhaps would have to sugar-coat the proposed cess on sugar as diabetes tax.

Sin tax

Most of the sin taxes the world over like on liquor, tobacco products, casinos and marijuana is accepted philosophically and taken in their strides by those who savour them.

Heavy tax on liquor and tobacco now no longer meets with resistance in India with people sagely nodding their heads and saying sin tax after all has a justification even if it is steep.

Even political parties don’t make much fuss over sin taxes except when it takes the extreme hue — prohibition.

But then, even sugar-coating sugar cess with the euphemism diabetes tax might meet with a stiff resistance as it could possibly affect the livelihood of millions of sugarcane farmers as well as the staple food of many people. Remember in some parts of India sweets figure in the daily menu. Some serve them as starters.

The medical world is almost unanimous in its view that sugar has no nutritional value.

If Qatar’s government could do it, the Indian government should also do it with stronger reason — India has the dubious distinction of being the diabetic capital of the world.

The same cannot be done with rice because it per se is not sugar-inducing. It is the starch in it that is dangerous. In other words, it is the way rice is cooked that is important. Dieticians recommend rice being cooked directly, the traditional way, eschewing the ease and quickness of pressure cookers that makes rice stew in starch, making it impossible to drain after cooking.

The point is people by and large respect medical opinion, especially the warnings. The substantial fall in number of smokers is thanks to the message dinned into people’s minds that smoking causes cancer. Sugar, as it is, does not figure as prominently in the taboo list of items, which shows that extensive medical and public interest campaign must precede the diabetes tax.

Intelligent parents condition the taste buds of their children by adding as little as possible of sugar in their daily diet.

Textbooks can do their bit in this direction. So can the exhortation to burn out excessive calories and sugar. But in the long run nothing short of a diabetes tax can shake Indians in general from their unrestrained sugar consumption.

The author is a Chennai-based chartered accountant.

Published on May 10, 2018

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