You are here: Home - Household Bills - News -

Think tank argues ‘sin taxes’ will hit poor hardest

0
Written by:
17/05/2018
A summit to be held this week could increase taxes on food and drink deemed ‘sinful’, raising household bills across the globe, warned the Institute of Economic Affairs (IEA).

The meeting is organised by Michael Bloomberg and the World Health Organisation (WHO), and will take place in Geneva. The WHO is encouraging governments to introduce higher taxes on unhealthy food and drink.

The WHO claims that a 20% increase in the price of fizzy drinks would decrease consumption by 20% and improve health. It comes at a time when obesity is putting an increasing strain on government finances across the globe.

The IEA argues there is no international evidence that sugar taxes have reduced obesity. Analysis by the IEA’s head of lifestyle economics, Christopher Snowdon, showed that a 20% tax on the food and drinks that the WHO considers ‘unhealthy’ would cost a typical British family £458 extra per year.

It argues that the WHO’s definition of ‘unhealthy’ food is anything high in fat, sugar, salt or calories, which could see taxes rise on milk drinks, breakfast cereals, confectionery, baked goods, yoghurts, crisps, bread, soup and lunchbox staples such as sliced ham. It said that ‘sin taxes’ would hit the poor hardest.

The research stated: “Sin taxes are a reliable source of revenue precisely because – for the most part – they simply raise the cost of living. While they are intended to reduce consumption of demerit goods and indirectly improve health, the products being targeted are price inelastic, meaning consumers will be forced into paying more for their food and drink.”

Snowden said: “The meeting this weekend might be deliberately behind closed doors, but we know what it’s about….Taxing the groceries of ordinary families will only succeed in making them poorer, when all the credible evidence shows that the best way to improve health is to make people richer.”

The UK already has a tax on sugary drinks, introduced at the start of this tax year. Manufacturers have to pay a levy on the high-sugar drinks they sell. The tax has already prompted leading brands such as Fanta, Ribena and Lucozade to reduce the sugar content of their drinks.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
mobile phone complaints
Consumers net £1.3m in redress for property complaints

The Property Ombudsman revealed it dealt with more than 3,000 sales and lettings complaints in 2017, with consumers receiving £1.36m...

Close