Context: This article is based on an Editorial  “Tax HFSS foods, view it as a public health imperative” which was published in the Hindu. The high consumption of High Fat Sugar Salt (HFSS) foods in India is one of the major risk factors for various health issues. India as the world’s largest producer and consumer of sugar in 2022, has faced an alarming rise in consumption of HFSS food. 

Consumption of HFSS Foods: Rising Concerns

• It leads to various health issues including obesity, diabetes and high blood pressure. 
• World Bank report of 2019: Worldwide, 70% of all overweight and obese people live in Low- and Middle-Income Countries. 
• Burden of the Non-Communicable Diseases (NCDs): 1.2 million deaths in India can be attributed to dietary risks alone. 
• Impact on Economy: The economic impact of overweight and obesity in India was estimated at $23 billion in 2017. If unattended, it would rise to $480 billion by 2060.

Taxing HFSS Foods in India: Need 

• Effectively designed taxes can have multiple benefits:
  • They can act as a deterrent to consuming HFSS
  • Promote healthier food choices
  • Prompt manufacturers to reformulate foods
  • Improve public health outcomes
  • Reduce the burden on the health-care system
  • Foster the nation’s well-being
• Inadequate current GST rates on ultra-processed Foods: Current GST rates do not adequately align with nutritional content and have a limited impact on altering consumption baskets in favor healthier alternatives.

How Taxation can help to combat this Challenge?

• A tool for Changing Dietary Habit: Taxation is considered to be an effective means to reduce the consumption of these products as most consumers are price responsive towards them. 
• Tax on HFSS Food: Taxation on High Fat Sugar Salt (HFSS) Food food is less common, although rapidly increasing. 
  • Some 16 countries including Denmark, France, Hungary, Mexico, South Africa, the United Kingdom and the United States, among others, have a tax on High Fat Sugar Salt (HFSS) foods. 
  • Most recently, Colombia’s “junk food law” introduced a gradually increasing levy on ultra-processed foods, providing a model for other nations. 
• An Example Set by Kerala: In India, Kerala had also introduced a ‘fat tax’ in 2016, which later got subsumed into India’s Goods and Services Tax in 2017.

Must Read: India Spending Billions On Fast Food – Reported By ATNI

Points need to be Considered and Remembered before Implementation of the HFSS Food Tax

• Not used as a means of Revenue Raising: It should be seen as a fiscal tool to incentivise the industry to reformulate the products more in favor of healthier alternatives and for people to reorganize their food consumption for a healthier diet. 
• Need for Designed Properly: If properly designed, High Fat Sugar Salt (HFSS) food tax can be both non-regressive, and fiscally neutral. 
• On the Basis of Nutritional Quality: Tax rates need to be differentiated based on the nutritional quality of the food so as to incentivise product reformulations. 

Conclusion:

The HFSS food not only poses severe health risks but also impacts productivity and economic growth and requires urgent action. To combat the rising epidemic of overweight and obesity by creating a more sustainable and equitable food system, there is a need for HFSS taxation with other measures such as promotion of nutrition literacy and effective food labeling.