Israel urged to tax sugary soft drinks

Coca Cola Photo: Reuters

Israel National Council on Diabetes chairperson Prof. Itamar Raz has asked the Israel Tax Authority to tax sugar-rich drinks in the fight against obesity and diabetes.

Implementation of the Ministry of Health's food marking reform regulations has been postponed to 2020, but its proponents are now trying to combat obesity through taxation of sugar-rich soft drinks. The advocates of these regulations now hope to enlist incoming Israel Tax Authority head Eran Yaakov in their efforts to institute such a tax, which is imposed in many countries around the world. Yaakov was on the healthy nutrition committee that initiated the food marking reform.

A letter sent to the Tax Authority in recent days stated that Yaakov's appointment had aroused great hopes, "hopes that you will be the one to lead this necessary change in Israel of devising a new and important economic and taxation mechanism for reducing consumption of sugar-rich soft drinks in Israel."

Behind the letter is Israel National Council on Diabetes chairperson Prof. Itamar Raz, who was one of the initiators of the regulatory committee that devised the food marking reform. Raz also referred to the views expressed by Yaakov himself in his position as Tax Authority deputy head on the committee in support of taxing sugar-rich food and beverages. On this committee, Yaakov mentioned the possibility of taxing food, based on a method that takes into account the product's nutritional values and assigns a rating reflecting its contribution to health.

Raz writes. "It is known that your professional opinion is that there is a need to change the nutrition of people in the country and reduce the excessive consumption of sugar for the purpose of reducing morbidity and improving health indices. Putting a sugar tax on today's economic agenda will be a substantial and important step in the struggle for health, especially in view of the global experience concerning the effect of such taxation on the volume of sugar-rich food and beverages."

Raz, who represents other public organizations that support the measure, has sought a meeting with Yaakov in order to move it forward.

Israel currently has no taxation on non-alcoholic food products and beverages for health purposes. In 2016, the World Health Organization (WHO) stated for the first time that increasing taxes on sugar rich soft drinks would save lives by reducing their consumption, thereby lessening the frequency of obesity, diabetes, and tooth decay.

Subsequent to this statement, the Knesset Research and Information Center published a survey two years ago on the subject of taxation of potentially harmful food and beverages, which was published together with the conclusions of the regulation committee for health nutrition. These conclusions stated, "Although taxation of harmful food is likely to effective in reducing its consumption, other means recommended by the committee should be employed first, and after a period of 1-2 years, the need for taxation should be reassessed after more global experience has been accumulated that will make it possible to assess the effect of taxation on consumption."

The research conclusions were that decision-makers and the public in Israel were ready for a tax on food products and beverages that contribute to obesity if it is part of a series of actions aimed at combating obesity. The survey published in 2016 also stated, "Difficulties in implementing a tax are to be expected, given opposition and the technical problems involved."

World instituting sugar tax

Since then, several countries have begun implementing the tax. Last week, a law imposing a sugar tax on soft drinks went into effect in the UK as part of the struggle against obesity. The UK thereby joined other countries that have instituted similar laws: France, Norway, Mexico, Thailand, and South Africa starting at the beginning of April, as well as the city of Philadelphia in the US.

Reports from the UK state that manufacturers have declared a cut in the level of sugar in some of their products in order to avoid the tax. At the same time, Coca Cola and Pepsi announced that they would not change the formulas for their beverages, which contain over 10 grams of sugar per 100 milliliters. Estimates in the UK are that the annual revenue from the tax will reach £240 million.

A report by the WHO puts Israel high among consumers of sugar-rich soft drinks. Israeli teenagers are in first place worldwide: 42% of them drink sweetened beverages every day, compared with only 26% in the rest of the world.

Attempts at initiating such measures were made in Israel in the past, but were thwarted. In June 2016, MK Eitan Cabel (Zionist Union) tried to promote legislation aimed at reducing consumption of various types of sweetened beverages by taxing them. An internal discussion also took place in the Tax Authority in 2016, but as far as is known, no legislation resulted from this.

Published by Globes [online], Israel business news - www.globes-online.com - on April 12, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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Coca Cola Photo: Reuters
Coca Cola Photo: Reuters
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