Most of the countries are facing health issues due to the consumption of wrong products that adversely affect the health of the people. The teenage and young people are mostly habitual of eating junk foods or consumption non-alcoholic drinks that give rise to many diseases. For this, the governments of most of the developed and developing countries have implemented taxes on such food and beverage items so that it does not give rise to any kind of untoward issues. The organization International Tax & Investment Center has helped the government of various countries through the inputs of their respective reports on food habits of people.
Factors Involved in Implementing SFBT
As the governments of developed and developing countries are targeting some of the food and beverage items, so that it does not affect their healthcare system. In return, because of implementing taxes on these items, the government is also losing revenue that can be generated in good amount.
In this event, the suggestions from firm like International Tax & Investment Center proves helpful for the government as they present the statistics from across the globe and gives suggestion on solving particular issues. Here are some of the factors that are related to the implementation of SFBT and the effect on government revenue:-
- In most of the cases, the consumers do not come to know about the taxes that are charged by the government on the specific foods and non-alcoholic beverages because the rate is consumed in wholesale and retail prices. This only shows a marginal increase in the prices that do not affect the consumer purchasing power.
- In most of the cases, if the government wants to put a cut on the consumption of some of the food items that are responsible for deteriorating the health of the people then they will levy heavy prices on these products. This will definitely affect the consumption and on the other hand, the sales of the particular product will go down that puts an impact on the revenue of the government.
- The policymakers of the Selective Food and Beverage Taxes should keep in mind both the situation as the health of people and the government’s revenue structure. It is observed that if the prices of the particular food product rises then only people switch on to the cheaper product for getting same taste but they are low in quality that also affect their health. Therefore, government needs to take a special survey before taxing the particular food and beverages.
- By levying SFBT on some of the products, the people living near border areas switch to trans-border purchases as they get the similar food products and beverages at lower prices. This in return affects the tax situation of the government and a proper check only can solve this problem.
From the above-mentioned points, International Tax & Investment Center states that the government should impose taxes on the selective food products and beverages that affect the health of their people. However, this should be kept in mind by the government that they should not lose revenue, as it will directly affect the economy too.