A proposal to impose hefty taxes on processed and ultra-processed foods may prove a boon for public health but raises troubling questions over the government’s ongoing transgressions into matters best left to personal choice.
The Ministry of National Health Services’ proposal aims to hike up federal excise duty from 20-50% by 2029 on hundreds of food items, including bakery items, sugary beverages, and ice cream. The ultimate aim of the initiative is to reduce the incidence of non-communicable diseases while generating revenue for health initiatives. A good idea on the face of it, its effectiveness will depend on authorities considering all potential pitfalls; an unlikely scenario based on Pakistan’s history of similar taxation measures.
Globally, similar fiscal measures have netted mixed results. A soda tax in Mexico triggered a 6% average decrease in sugary drink purchases, particularly among low-income households. South Africa’s 2018 sugar tax resulted in a 29% drop in sugary beverage purchases and a 51% decrease in calorie intake. Denmark’s 2011 fat tax was repealed after just 15 months due to administrative challenges and cross-border shopping concerns, though did post a 10–15% decline in saturated fat consumption.
Pakistan has attempted various similar measures in the past. Its soda tax was upped to 20% in 2023, while it imposed an average tax rate on cigarettes of around 45% of retail price. Results have not been as positive as anticipated, primarily due to tax evasion and smuggling, penalizing taxpayers without yielding an equivalent benefit. A sugar tax, however, is becoming ever-more urgent, as the country ranks third globally in diabetes prevalence and any improvement can significantly improve health outcomes. Yet, the government’s proposal is already rife with contradictions.
While aiming to reduce unhealthy food intake, it paradoxically seeks increased tax revenue. Such taxes also tend to disproportionately impact low-income populations, for whom ultra-processed foods are often more accessible and affordable. The broader issue of state intervention in personal dietary choices further raises concerns about individual freedoms, positioning the state of Pakistan as increasingly involved in every aspect of a citizen’s life.
If the aim is to achieve effective and equitable taxation, the government must devise and implement a comprehensive strategy that includes public education on nutrition; subsidies for healthier food options; and transparent allocation of tax revenues to health programs. Lacking such measures, the policy will be seen a punitive rather than protective. It is crucial that such regulation respects personal choice.
After all, no government wants to be the one that steals ice cream from children.