Tax on Sugary Drinks Will Reduce Healthcare Spending, Boost Govt’s Revenues, Says Varsity Don

James Emejo in Abuja

A Professor of Endocrinology and Diabetology/ Director, Centre for Diabetes Studies, University of Abuja, Mrs. Felicia Anumah, has said taxes on sugary drinks would reduce consumption and save costs from obesity-related health challenges among others.

She stressed that evidence had shown that a tax on sugary drinks that raises prices by 20 per cent could actually lead to a 20 per cent reduction in consumption, thus preventing obesity and diabetes.

Addressing journalists over the weekend, shortly after a rally at the University of Abuja Teaching Hospital, Gwagwalada, on the urgent need to scale up taxation on sugar-sweetened beverages in the country, she said small changes in diet for many individuals can translate into large population health gains at relatively low cost.

Specifically, Anumah said studies had suggested that over a period of 10 years, a tax on sugary drinks of one cent per ounce in the United States of America would result in more than $17 billion in healthcare cost savings.

The diabetologist further explained that the over-consumption of sugar remained a major contributor to obesity, diabetes and tooth decay, and warned that people who consume sugary drinks regularly (one to two cans a day or more) have a 26 per cent greater risk of developing type 2 diabetes than people who rarely consume such drinks.
Anumah said obesity remains a worldwide epidemic which remained a major risk factor for the growing burden of non-communicable diseases (NCDs) including diabetes, heart diseases and some cancers.

She said, “In the past three decades, globalisation and urbanisation have led to a shift in food culture and convergence in consumption habits. In this ‘nutrition transition’, the consumption of foods high in fats, sugars, salt and sweeteners has increased throughout the developing world. This transition therefore is implicated in the rapid rise of obesity and diet-related chronic diseases, worldwide.”
She also lamented the recent suspension Sugar-Sweetened Beverage (SSB) Tax Policy as contained in the Finance Act, 2021, which had imposed a N10 per liter tax on sugary drinks.

The university don described the SSB as an anti-obesity, anti-diabetes policy which should be encouraged.
She pointed out that evidence had shown that with respect to obesity, an effective starting point to reduce unhealthy food consumption will be through the taxing of SSBs, emphasising the need to combine programmes that target individual behaviour change with a fiscal policy, particularly an excise tax on SSBs.
She cited a 2013 report which looked at nine different studies from USA, Mexico, Brazil and France, which presented the first global overview of the effect of SSB price on consumption and body weight.

“The result showed that higher prices are associated with lower demand for SSBs and subsequently, a decrease in the prevalence of overweight and obesity.
“According to WHO, a major action aimed at reducing the consumption of sugars is the taxation of sugary drinks. Just as taxing tobacco helped to reduce tobacco use, taxing sugary drinks can help reduce consumption of sugars.”
On the revenue projection of the sugar tax, Anumah said, “In the United States of America, soft drink revenue is approximately $70 billion per year, so a modest tax would generate billions of dollars.

“Also in China, a tax on sugary drinks of 1 Yuan ($ 0.16) per litre in China would generate an estimated 73.6 billion yuan ($ 11.8 billion) in revenues.”

She said, “Revenue generated by these taxes could be spent on efforts to improve health care systems, encourage healthier diets, increase physical activity, or to finance health promotion organisations that could advocate for healthy eating including further reductions in the consumption of SSBs.

“I addition, in areas where people drink SSBS because they do not have access to clean water, ensuring universal access to clean, piped water should be a priority and build capacity for effective tax administration.”

According to her, SSB taxes can be a win-win-win strategy – a “win for population health, a win for government revenue and a win for health equity.”