You would have already heard the news that the Pan American Health Organization (PAHO) is doing a study that will be used to determine if Antigua & Barbuda should introduce a “sugar tax”. The news was delivered by Health Minister Molywn Joseph who said the intention is to make it more difficult for residents to buy sugary foods and beverages which contribute to diabetes and other non-communicable diseases.
According to the minister, “Our thinking is, if we create the tax on sugar, we would decrease the tax on the foods that are healthy. So, it would be what you would call a neutral type of approach.” He added, “We are not doing this without scientific information. We are going to let the science lead us.” The eventual goal is to save lives in Antigua & Barbuda and we have no issues with that.
Science is absolutely critical in any decision of this nature, as is consultation with stakeholders and the people; which the minister has promised will come after the report arrives in July. Sugar taxes are nothing new to the world. Other countries have implemented them with varying degrees of success and if you at look the issue through a wider lens, you will notice that a sugar tax is just another form of what is commonly referred to as a “sin tax”.
A sin tax, for those not familiar with the term, is a tax that is specifically levied on things that are deemed harmful to persons or society as a whole. Good examples of sin taxes are those applied to alcohol and tobacco. Over time, the basket of goods and services to which sin taxes are applied has grown to include things like sugary drinks, fatty foods, and even services like gambling. Sin taxes are generally applied as a deterrent but have the beneficial effect of raising significant revenue for governments.
Typically, sin taxes are politically friendly taxes due to the general perception that they are for the betterment of society, however studies have shown that they have a disproportionate effect on the poor. Further criticism has come from individuals and organisations that believe that discriminatory taxation, such as sin taxes, is another infringement on people’s right to choose and one step closer to the dreaded “nanny state”.
While there may be genuine good intentions for the introduction of sin taxes, there is also a serious risk that they achieve little; other than a few more dollars in the government coffers and a few less dollars in people’s pockets. This is not to say that sin taxes are not effective. There are many studies which show that they are the most effective way to combat, what some call, gratuitous behaviour.
Where sin taxes have been most effective are in places where the tax revenues have been used to educate the population on the consequences of indulgence in the “sin”. A good example of this is Truth Initiative (formerly the American Legacy Foundation) which is a not-for-profit tobacco control organisation with the mission to prevent teen smoking and encouraging smokers to quit. You have probably seen their advertisements on television where they “expose big tobacco” and encourage the youth to be the generation to quit smoking. The Truth Initiative is funded by money received from the tobacco industry under the Master Settlement Agreement (MSA) of the late nineties. Slightly different than a tax but the concept is the same.
While it is early days yet in the government’s plan for the sugar tax, we feel compelled to point out that education must be a key component of any fight against unnecessary sugar consumption and non-communicable diseases. It would appear to us that if the tax is neutral then the effect may also be neutral. If the government does not have the resources to launch an aggressive education campaign against the ills of sugar consumption then the effects may be limited, if there is any effect at all.
We are making the effort to highlight this apparent deficiency in the overall plan in the hopes that the situation is corrected. Already, there are sin taxes for alcohol and cigarettes in our bit of paradise but there are no education programmes in place to change people’s perceptions and behaviour regarding consumption and consequences. Further, it would be wise money spent to include an economic impact analysis to determine the economic benefits of reducing sugar consumption. We dare to say that the beneficial impact to our health care system alone would be significant.
If it is that we decide to pursue a sugar tax, let us not implement it in a half-hearted manner so that it leaves a bitter taste in our mouths. Let us see this as more than a sweetener for the treasury – like the other sin taxes. Rather, let us see this as an opportunity to implement a real change that can and will have a massive impact on the lives of our people.
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