Several governments across the world are currently considering raising the bar on sugar tax as a way of discouraging people from consuming sugary drinks and to fight obesity, but opponents of the move disagree, saying tax on sugar does not directly improve people’s health in any way, Reuters wrote.
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Several studies have linked sugar consumption in soft drinks and sweetened foods with increase in diabetes, heart disease, obesity and other debilitating conditions, and governments think the only way to make people naturally cut down on consuming sugary drinks is to raise sugar tax – a move that will also make soft drinks companies to raise the price of products with consumers subsequently buying less of them.
Imposing high tax on cigarettes and other tobacco products has made consumers to take less of them, and analysts think this might also help with sugary soft drinks and other sweetened foods with unhealthy amounts of high calories.
And another thing: this will channel more money into government coffers for developmental projects.
"This puts political leaders in a stronger position to enact policies such as taxes because the companies aren't considered unbreakable," said Kelly Brownell, dean of Duke University's Sanford School of Public Policy in North Carolina.
Indonesia, India, and the Philippines are currently analyzing how this sugar tax may play out in their countries, while UK’s Prime Minister David Cameron said in January that the UK might also consider the same decision if it works in other countries.
Coca-Cola and PepsiCo would not comment on the issue, they referred reporters to the International Council of Beverage Associations (ICBA). Both companies make over $870 million in annual sales from their soft drinks which have dominated the countries of the world.
But Kate Loatman, executive director of ICBA said the association does not support the tax on sugar imposed in Mexico, adding it is already in talks with lawmakers and the media to establish the point that sugar tax will not benefit anyone in the long run.
In responding to the situation in Britain, Indonesia and the Philippines, Loatman pointed out that "While we understand that there are discussions occurring in those countries, the bottom line is that taxes do not improve public health in any country."
But the National Institute of Public Health of Mexico, an independent public health institution associated with the Ministry of Health, said in October that "The implementation of this tax in Mexico as a measure to prevent obesity and diabetes has positioned our country internationally as a leader in public health."
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There however remains the business and economic side of it. Coca-Cola employs about 25,000 staff in Inda – and the Indian government is considering levying 40% on sugary drinks, a move the soft drinks company said would force them to close down several plants and factories and lay off workers.