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a blog from young economists at Nova SBE

Does “the sugar tax” affect on obesity rates?

The Finnish government has implemented “a sugar tax”, which means higher taxes for foods containing sugar (for ex. sweets, drinks and ice cream). The tax aims to promote healthy nutrition as well as increase central government tax revenues. According to Finnish government, the tax is mainly is targeted to control the consumption of sweets especially among children and young adults. The obesity rates among these groups have been increasing radically in the past decades and also, these demographic groups are the ones consuming sweets the most.

The sugar tax was introduced in January 2011, but the results today are quite reverse. The studies show that the consumption of sweets decreased radically during the first year of the new taxation. However, since 2012 the consumption of sweets has been steadily increasing and is today actually even more than it was before the introduction of the sugar tax.  In my opinion, in order to truly effect on the consuming behavior, the government should rethink the whole taxation system of goods, not just target one sector.

Sugar’s connection to obesity and many diseases is undeniable and it has been proven in many resent research. However, solely increasing the tax rates of goods containing sugar cannot control the obesity.  To maximize the positive effects of the sugar tax I believe the government should also consider decreasing the taxation of fresh fruit and vegetables. Low income households spend a greater proportion of their income on groceries than high income households and the current taxation reduces their purchasing power the most. Decreasing the taxes of fresh fruits and vegetables could shift consumers, especially in the low income end, consuming behavior to replacing the sweets with healthy snacks instead of foods containing lot of salt and fat. Several studies have shown that this kind of pricing shifts purchases of food towards healthier choices especially among young and low-income population.

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Author: studentnovasbe

Master student in Nova Sbe

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