From consumer advocates to organizations of stores and carinderia owners, a number of groups have come out in opposition to the proposed tax on sugar-sweetened beverages. Their disagreement with the proposed tax measure has been more or less economic in nature. Considering the demographic that consumes most if not all of the affected products, any movement in their prices will have repercussions in the budgeting 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 also brings up the issue of whether or not it really is a health measure as proponents paint it to be. Dutifully, the bill’s critics point out that there are many other potential sources of funds for the Duterte administration’s ambitious infrastructure program; just plugging the leaks in the Bureau of Customs as a result of smuggling promises many times the projected collection from the so-called sweet tax. Revisiting the public-private partnership model to fund these projects should also be on the agenda.
But even granting that it is a health measure, does that argument hold? Health maintenance, after all, is a complex problem and the science had 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.
Thus, the health angle put forth by proponents of the SSB tax is in many ways a way to “sugar coat,” so to speak, what is in reality a revenue generating measure. We remember that the administration had instructed congress to prioritize the passage of its banner tax reform program called TRAIN in time for implementation by January 2018.
This is an issue close to my heart, being diabetic myself. I have long known that minimizing sugar intake is just part of a holistic change in lifestyle that living with this disease demands. Proposed measures such as the “sweet tax” are by no means limited to the Philippines. For legislators, there is an allure in the imposition of additional taxes on food and drinks, including and especially soda, as a simple and convenient solution to increasing incidences in obesity.
But the experience of many countries and cities all over the world tell us that the demand for beverages tend to be “inelastic” in the first place, so any attempt to control their consumption via taxation would be untenable. Worse, consumers of these products are most likely to just substitute untaxed products by equally caloric food and drink products in their diet. And even if there was a drop in the consumption of these products, the human body’s dynamic metabolic adjustment is likely to 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, among others, there was 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, moreover, per capita soda and overall sugary drink consumptions fell 27 and 12 percent respectively between 2004 and 2015, but obesity rates nevertheless 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 conclude “a striking absence of success over the long-term.” Consumers respond to price incentives, no question, but outside of the behavior modification the ultimate effect of a tax measure on diet is often “so small as to be utterly insignificant.”
Thus, the public health angle that SSB tax proponents forward, while seemingly laudable, in reality merely disguises the measure for what it is: A revenue scheme. The Canadian case, for instance, earned for Ottawa some $1.7 billion annually, never mind equity, efficiency, or necessity, necessary policy criteria for new taxes. 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 this December, 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, stopping gambling and illicit trade would be the healthier option.