The proposed tax on sugar will surely leave a bad taste in one’s mouth if lawmakers go ahead and pass the legislation. From consumer advocates to organizations of stores and carinderia owners, a number of groups have come out opposing the proposed tax on sugar-sweetened beverages.
The resistance is understandable and economic in nature. Considering the demographic that consumes most if not all of the affected products, any movement in their prices will have repercussions on the budget of low-income families, not to say anything of the debilitating blow to affected retail stores and industries.
The anticipated government revenues to be raised from the proposal also leads consumers to suspect that the proposal is not a health measure as proponents want to paint it. The bill’s critics noted many other potential sources of funds for the administration’s ambitious infrastructure program. Plugging the leaks in the Bureau of Customs as a result of smuggling, for one, offers much higher revenues than the so-called sweet tax. Revisiting the public-private partnership model to fund the infrastructure projects can also yield the desired results
But even granting that it is a health measure, does that argument hold? Health maintenance, after all, is a complex problem and science has long established that it cannot be blamed on a single factor, including sugar. Medical experts have consistently pointed out that things like lifestyle, stress, exercise, overall diet, and even the environment and sanitation, all contribute to the state of one’s health.
The health angle put forth by proponents of the SSB tax is a way to sugarcoat what in reality is a revenue generating measure. The administration of President Rodrigo Duterte had instructed Congress to prioritize the passage of its banner tax reform program, called TRAIN, in time for implementation by January 2018.
Solving obesity?
Diabetic people know that minimizing sugar intake is just part of a holistic change required in controlling the disease. Lawmakers, however, wrongly believe that the imposition of additional taxes on food and drinks, including and especially soda, is a simple and convenient solution to reduce incidences in obesity.
But the experience of many countries and cities across the world tells us that the demand for beverages tends to be “inelastic.” Thus, any attempt to control the consumption through taxation would be questionable. Worse, consumers of these products will just likely substitute untaxed products and equally caloric food and drink items in their diet. And even if there was a drop in the consumption of these products, the human body’s dynamic metabolic adjustment would likely resist the effect of such change, lowering the chances of weight loss.
It is no coincidence then that for countries that have imposed food and drink taxes, such as the United States, Mexico and France, there is little evidence of any discernible decline in obesity rates. The average Body Mass Index for these countries, in fact, either remained stable or increased.
In Canada, the per capita soda and overall sugary drink consumptions fell 27 and 12 percent, respectively, between 2004 and 2015, but the obesity rates grew, putting to question the traditionally accepted correlation between soda consumption and obesity.
Elsewhere in the world, research from both the scientific community and the taxation policy side concludes “a striking absence of success over the long-term.” Consumers respond to price incentives, but outside of the behavior modification, the ultimate effect of a tax measure on diet is often so small as to be utterly insignificant.
The public health angle of SSB tax proponents, while seemingly laudable, in reality merely disguises the measure for what it is: a revenue scheme. Clearly, obesity and diabetes are complex lifestyle diseases, requiring a holistic remedy, not a one-size-fits-all approach like the SSB tax.
As the TRAIN bill is being pushed to be passed into law next, several amendments have been proposed in the Senate to find a “sweeter” balance between the millions of stakeholders that will be affected and the valid need to raise revenues for badly needed infrastructure projects. Like diabetes, a holistic approach that combines real reforms in tax collection, stopping, corruption, and ending gambling and illicit trade will be the healthier option.
