Taxes on candy and other products containing excessive amounts of sugar could be “highly effective” and provide significant benefits, according to an Ecorys study. The organization carried out research on behalf of the Treasury and Department of Health to learn more about the implications of a theoretical wide-ranging sugar tax. A sugar tax, if implemented improperly, can lead to multiple lawsuits, a study has found.
Taxing products with more than 6% sugar could theoretically reduce the risk of diabetes. This tax would effectively increase the number of healthy years for families that consume the most sugar per person. Specifically, sugar intake will affect more than 80% of all Dutch households.
In addition, hundreds of millions of euros will be saved in healthcare costs related to sugar consumption. The tax would also extend people’s life expectancy, meaning more money would be spent on caring for the elderly. On the other hand, productivity gains will come from fewer calls in sick and medically unfit work reporting due to healthier lifestyles.
The researchers added that the tax would pump around 1 billion euros into government coffers. They believe the tax will reduce supermarket income as people choose other options. According to calculations, this amounts to a loss of approximately 26 million to 29 million euros.
The researchers’ proposal is to impose a gradual tax on products containing more than 6% sugar. If the product contains more sugar, the tax will be higher. According to this study, the sugar tax is legally sustainable as a consumption tax. This does not apply to the increased rate of VAT.
It is important to clearly define which products are subject to additional tax and which are not. This limit is “loosely based on the Wheel of Five,” a specific guideline from the Nutrition Center. To prevent fruit from being taxed, the tax should be limited to products that require nutrition labeling.
Ministers who sent a report to the Dutch lower house of parliament, Tweede Kamel, said the next government should make a political decision. Tweed Comer agreed.
