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Indian state of Kerala imposes “fat tax”


Kerala has become the first Indian state to take the unprecedented step of introducing a “fat tax” on burgers, pizzas, doughnuts and tacos

According to the BBC, the state’s finance minister, Thomas Isaac said the 14.5% tax is aimed at making people more conscious about food choices.

He said, “This is more of a preventive measure as Kerala’s food habits are changing dramatically. People are eating a lot of junk food and rejecting traditional food.”

Though still relatively new, the presence of global fast food chains in Indian urban areas is growing alongside the country’s increasing affluence. Kerala now was the most number of people suffering from obesity after the northern state of Punjab.

The National Restaurant Association of India secretary Rahul Singh told the Indian newspaper Economic Times that targeting the fast food market, which accounts for less than 10% of Indian consumption, is an “easy scapegoat”.

The move has been described as anti-business, while others say the move singles out multinationals. Executives at Yum Restaurants, which controls franchise rights for Pizza Hut and KFC in India told Economic Times the tax burden would be passed directly on to the consumer.

Kerala is following a number of other jurisdictions, including Hungary and Denmark in levying punitive taxes as a direct attempt to improve public health. The UK is currently negotiating its introduction of the sugar tax. Mexico, meanwhile, has had some marked success with its version of the soda “sin tax”, and some US states are attempting to overcome pressure from the big soda company lobby to impose similar measures.

In the UK, the food and drink industry had called for George Osborne’s sugar tax policy to be halted, following the detrimental impact of the vote to leave the EU.

Source: Economia

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