Publication: Health and Distributional Effects Taxing Sugar-Sweetened Beverages: The Case of Kazakhstan
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2020-06
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2020-06
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Consumption of sugar-sweetened beverages (SSBs) has been linked to a range of noncommunicable diseases (NCDs), including diabetes, obesity, cardiovascular disease, and over 12 types of cancer (Singh, et al. 2015). Increasingly, governments around the world are taxing SSBs to curb sugar consumption. However, especially in low and middle-income countries, concern is growing over the apparent regressive character of consumer taxes. This note contributes to the literature on the effect of taxes on unhealthy products. The extended cost-benefit analysis (ECBA) methodology is applied to assess distributional effects of an increase of SSB taxes on household expenditures, out-of-pocket (OOP) medical expenses, and productivity in Kazakhstan. Results suggest that the long-term net income effect of an increase in SSB taxes is progressive: lower-income deciles benefit relatively more than higher-income deciles.
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“Fuchs, Alan; Mandeville, Kate; Alonso-Soria, Ana Cristina. 2020. Health and Distributional Effects Taxing Sugar-Sweetened Beverages: The Case of Kazakhstan. Poverty and Equity Notes;No. 24. © World Bank. http://hdl.handle.net/10986/33859 License: CC BY 3.0 IGO.”
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Publication Health and Distributional Impacts of a Tax on Sugar-Sweetened Beverages in Kazakhstan(World Bank, Washington, DC, 2020-04)The promotion of healthy diets is at the center of many strategies to prevent and control noncommunicable diseases (NCDs) worldwide. Sugar-sweetened beverages (SSB) are the target of many of these strategies given their contribution to obesity and related diseases. In addition to detrimental health effects, overconsumption of SSBs can result in economic costs derived from health care expenditures, forgone productivity, permanent disability, and premature death. The World Health Organization (WHO 2017a) has concluded that one of the most effective tools for reducing obesity rates and other related NCDs is the implementation of taxes to increase the prices of SSBs by at least 20 percent. Epidemiological models indicate that taxing SSBs by sugar content could result in a 200 million-pound (90.7 million kilogram) weight reduction worldwide (Grummon, et al. 2019). This report represents the first adaptation of the extended cost-benefit analysis methodology to examine taxes on SSBs. The main outcome of interest is the net effect of the taxes on household income via three channels: (1) larger amount of household budget expenditure on SSBs, (2) savings in out-of-pocket (OOP) spending on health care because of lower disease incidence associated with reduced SSB consumption, and (3) higher labor income resulting from an increase in life-expectancy. The model uses the simplified assumption that a reduction in the consumption of SSBs has an immediate effect on health and so on employment-related income.Publication Business, Employment, and Productivity Impacts of Sugar-Sweetened Beverages Taxes(World Bank, Washington, DC, 2020-06-30)Industry-sponsored studies reporting negative effects of SSB taxes on businesses, employment, and economic growth have been used very effectively to support arguments against SSB taxes and influence health-related policy. These studies tend to be based on questionable assumptions and provide only a partial picture of economic impacts. Emerging evidence from independent evaluation and modelling studies consistently identifies net positive economic impacts from SSB taxes, including overall employment and productivity gains, and increased government spending.Publication Taxes on Sugar-Sweetened Beverages(World Bank, Washington, DC, 2020-10)Taxes on SSB are an increasingly popular fiscal policy for health. 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In addition to fiscal policy and regulation, this strategy included other health promotion and prevention interventions as well as measures to ensure better access to effective health care services. The decision to implement this fiscal policy was the result of a long advocacy process in which different actors participated, including civil society organizations and government agencies, which provided needed evidence on the status of the epidemic and options to fight against it. The taxes were designed to avoid, as much as possible, the substitution of consumption of the taxed goods for other unhealthy foods and beverages not subject to taxation. These taxes have been successful in increasing both the fiscal revenues and the price of the products taxed. There is also evidence that they have reduced consumption, particularly of SSBs. The taxes seem to have the highest impact among people in the poorest quintiles of the income distribution, who had experienced the highest increase in consumption of the goods under taxation in the last years. A debate remains on the actual impact of the taxes, particularly on health outcomes. Thus it is important to continue monitoring the impact of the taxes through the development of price and volume indicators, based on publicly available data, as well as health outcome indicators.Publication Taxes on Sugar-Sweetened Beverages(World Bank, Washington, DC, 2020-04)This evidence review is designed to support policy makers seeking to implement a tax on sugar-sweetened beverages (SSB). It synthesizes the latest global evidence of effectiveness of SSB taxes and summarizes international experiences with SSB taxation to-date. SSBs are non-alcoholic beverages that contain added caloric sweeteners, such as sucrose (sugar) or high-fructose corn syrup (HFCS). The main categories of SSBs are carbonated soft drinks, energy drinks, sports drinks, less than 100 percent fruit or vegetable juices, ready-to-drink teas and coffees, sweetened waters, and milk-based drinks. SSBs are easily consumed in excess and contribute significantly to sugar and energy intakes around the world without adding any nutritional value to diets. A person consuming one SSB per day can easily exceed the WHO’s guideline to limit free sugars to less than 10 percent (and ideally less than 5 percent) of total daily energy intake, and is at elevated risk of a range of adverse health effects including tooth decay, excess weight gain, and increased risk of developing obesity and type 2 diabetes. Although they are not the only component of diets linked to obesity and noncommunicable diseases (NCDs), the burden of disease attributable to SSBs is considerable given that they are a single, entirely discretionary (nonessential) component of the diet. From a public health perspective, taxation of SSBs is internationally recommended as a priority component of a comprehensive approach to preventing and controlling obesity and diet related NCDs.
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