The World Health Organization (WHO) has released data that shows a low global rate of taxes being applied to unhealthy products such as alcohol and sugary sweetened beverages. The findings highlight that the majority of countries are not using taxes to incentivise healthier behaviours, it said.
Globally 2.6 million people die from drinking alcohol every year and more than eight million from an unhealthy diet; implementing tax on alcohol and sugary sweetened beverages (SSBs) will reduce these deaths, the WHO suggested. Half of all countries taxing SSBs are also taxing water, which is not recommended by the organisation. Although 108 countries are taxing some sort of sugar-sweetened beverage, globally, on average, excise tax, a tax designated for a specified consumer product, represents a mere 6.6 per cent of the price of a soda or mineral.
At least 148 countries have applied excise taxes to alcoholic beverages at the national level. However, wine is exempted from excise taxes in at least 22 countries, most of which are in Europe. Globally, on average, the excise tax share in the price of the most sold brand of beer is 17.2 per cent. For the most sold brand of the most sold spirits type, it is 26.5 per cent.
A 2017 study shows that taxes that increase alcohol prices by 50 per cent would help avert more than 21 million deaths over 50 years and generate nearly $17 trillion in additional revenues. This is equivalent to the total government revenue of eight of the world’s largest economies in one year.
“Taxing unhealthy products creates healthier populations. It has a positive ripple effect across society – less disease and debilitation, and revenue for governments to provide public services. In the case of alcohol, taxes also help prevent violence and road traffic injuries,” said Dr Rüdiger Krech, Director, Health Promotion, WHO.
Countries like Lithuania, that increased alcohol tax in 2017 to drive down consumption have decreased deaths from alcohol-related diseases. Lithuania increased alcohol tax revenue from €234 million in 2016 to €323 million in 2018 and saw alcohol-related deaths drop from 23.4 per 100,000 people in 2016 to 18.1 per 100,000 people in 2018.
Research shows that taxing alcohol and SSBs helps cut down use of these products, and gives companies a reason to make healthier products. While at the same time tax on these products helps prevent injuries and noncommunicable diseases such as cancers, diabetes, and heart diseases.
A recent Gallup poll, conducted in collaboration with the WHO and Bloomberg Philanthropies, found that the majority of people surveyed across all countries supported increasing taxes on unhealthy products such as alcohol and SBBs.
The WHO recommends that excise tax should apply to all SSBs and alcoholic beverages.
