Beware the fat tax nightmare

- Last updated on GMT

Related tags: Tax, Food standards agency

The Food Standards Agency is planning to discuss whether so-called fat taxes have a role to play in improving the nation's diet.

It may be a perfectly sensible issue to debate, but such a regressive taxation policy would do nothing more than create lighter wallets for consumers. Even academics who have published complex economic studies to support ideas such as fat taxes admit there is pretty slim evidence that they would actually work in the real world.

Smart commentators have said that a fat tax system would add significant administration and compliance costs into the taxation system. You can also argue that industry's efforts to reformulate will have a far bigger impact on the health of the nation than any new food tax.

Consumers would be more likely to rail against any 'nanny state' intervention that represented a further tax on choice.

Reform, the influential think tank, recently highlighted the dangers of using 'corrective taxes' to change behaviour. It says environmental taxes now account for a staggering 7% of government revenues, with the main focus on energy. Reform says they have become a 'stealth tax with climate change justification'.

The use of so-called Pigovian taxes in the field of health and diet is a legitimate, but complex debate. We would be better off focusing on finding ways for industry and government to continue working together to encourage consumers to lead healthier lives.

Julian Hunt is director of communications at the Food and Drink Federation

Related topics: Legal

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