Tax on Saturated Fat

Will levying VAT on fatty foods promote a healthier lifestyle? This is the most recent debate that is raging between the Food Standards Agency and food manufactures.

On one hand, Government experts claim that increasing the tax on foods containing saturated fat will both help change the consumers’ food preferences and raise finances for the Government, but critics, on the other hand, claim that this will do nothing more than burn a hole in the wallets of middle-class consumers.

Daily Mail - TAX on junk and fatty food!The concept of declaring VAT on high fat products like butter, cheese, sausages, burgers, and sugary drinks is not new. Some countries like Denmark and Romania already have a tax on soft drinks and are considering adding it to other fatty products as well.

This proposal is being considered by US President Obama as well, who sees it as a way to raise the awareness of healthier food options in consumers and also to raise money for healthcare.

Britain’s National Obesity Forum has already given its verdict and is supporting the idea of a tax on foods high in saturated fat.                    Click on Image for full screen!

According to these experts, saturated fat leads to a higher incidence of coronary disease, strokes, obesity, and diabetes, and is responsible for about 3000 deaths per year.

This, along with a previous study conducted by the Downing Street Strategy Unit in 2004, has accelerated the decision of the Government to take this taxation move seriously. Studies in 2004 conducted at the Oxford and Nottingham Universities also suggested that imposing this ‘fat tax’ would raise about £2 billion each year and also act as a signal to the obese populace to watch their diet.

Food manufacturers and experts at the Institute for Fiscal Studies, however, disagree with the notion that levying this tax would have a positive impact on the health of the consumers.

According to Julian Hunt from the Food &Drink Federation, imposing a tax on these unhealthy food products can only make the wallets of the consumers lighter.  Although levying the VAT on fatty foods is based on the same premise as those on alcoholic drinks and tobacco, it can hit the budgets of poorer families who are already struggling to cope with the already ballooned inflation rates.

This action has also been referred to as a ‘Nanny State’ move, where the State is attempting to punish consumers who enjoy fatty food products. According to these critics, a better way to introduce healthier products to these consumers is by making healthy changes in restaurant recipes and products available in stores.

Although this bill was only just voted down by the British Medical Association last year, it may not be the case this year. So a pack of 250g Asda butter can cost £1.60 instead of £1.36; 600g of Asda English Cheddar cheese can end up costing £3.95 instead of £3.36, and so on.

Therefore, consumers should not be surprised if they find an extra 17.5% VAT added to their grocery bill, especially if their trollies are loaded with foods such as butter, cheese, sausages, and sugary drinks.

Clipping was taken from the Daily Mail! Do you agree or disagree? Please leave a note, we and our visitors will be more than happy to discuss.