In A First, Kerala Govt. Imposes 14.5% 'Fat Tax' On Fast Food

The new government of Kerala is planning to boost up the tax revenue this year. And to do so, they have decided to work on nine channels, of which, one is imposing a ‘fat tax’ of 14.5 % on food such as burgers, pizzas, donuts, sandwiches and pasta, sold through branded restaurants.

Such measures have been taken earlier in countries like Hungary and Denmark. Even in India, Nitish Kumar has imposed a tax of 13.5% in Bihar on items such as samosa, salted peanuts, to make up for the loss suffered by the ban on liquor.

This tax is supposed to add about Rs 10 crore to the tax revenue of state per year. The idea for this initiative was generated when during pre-budget discussions, suggestions were asked from the public and they demanded to do something about fast foods, especially big brands such as Dominos, Pizza Hut, McDonald’s etc.

“Kerala has one of the highest numbers of patients in the country when it comes to diabetes or hypertension. Many of these are related to lifestyle changes. Many of them (patients) are young. The seeds of such lifestyle habits are sown at a very young age,” says B Iqbal, a Kerala-based health activist. Seeing such problems, this form of tax imposition seems to be the need of the time.

The “fat tax” is concerned with issues related to public health more than revenue generation, “During the pre-budget discussions, we had asked the public for suggestions. They have been sending us mails to do something about fast foods, especially those, run by branded multinational restaurants,” said P. Mara Pandiyan, additional chief secretary at Kerala’s tax department.

“By imposing a tax, you are making it a little more non-affordable and more costly for the customer. Imposing (the tax) is not going to change consumption patterns.” The LDF government’s budget move is aimed at curbing consumption of junk food but may not end up doing so, industry representatives said.

This tax may certainly be a disincentive to the massive change in lifestyles of those suffering from obesity, but it may also be uncomfortable for those who are healthy and occasionally consume fast food.