A top regional health official is defending the imposition of a ten per cent tax on sweetened drinks, saying it was a necessary fiscal measure to address the obesity epidemic here and in the rest of the Caribbean.
The Pan American Health Organization (PAHO) representative here Dr Godfrey Xuereb told a public lecture at the Cave Hill Campus of the University of the West Indies this morning that based on price elasticity models, the levy should result in an estimated six to 16 per cent reduction in consumption of high-calorie drinks.
Speaking on the topic SSB Taxes In The Caribbean – Progress And Challengers, he made reference to Mexico, which recorded a 12 per cent reduction in consumption of sweetened drinks after the government there imposed a similar levy.
However, Dr Xuereb said retailers here were absorbing some of all of the tax, nullifying the desired impact.
“Although the economic evidence suggests that the tax will give you that reduction, we have to be very careful what we expect and what we see, because one of the things that might happen, and is happening, is that the tax may be absorbed partially or fully by the retailer. And therefore the ten per cent imposed tax will not be directly reflected at the price,” Dr Xuereb said.
He also contended that the industry was fighting the levy by attempting to lobby Government to scrap it.
“They tried to tell us that if we were good enough to remove the tax they would help us in other ways with this whole issue of chronic non-communicable diseases . . . .We said, ‘thanks, but no thanks,’” he quoted Prime Minister Freundel Stuart as telling the annual Errol Barrow Memorial event in Toronto.
Dr Xuereb applauded Government’s position on the matter, and appealed for continued efforts to fight obesity.
“This is the kind of pressure that the industry is putting. So some are absorbing the tax, some are putting pressure in other ways. And that is why we need to ensure we all work together to protect the tax.
“I think it’s incumbent that the University of the West Indies through the chronic research centre continues to provide the evidence for the Government, for civil society, for all of us to show how important the tax is not only in Barbados but all across the eastern Caribbean,” he said.
Dr Xuereb maintained that the tax was not another revenue earner for Government, but was meant “to influence our health, to influence our children’s behaviour, to make sure that our children who are drinking one or more carbonated drinks every day are discouraged from choosing the one that contains sugar”.
Based on a recommendation from the International Monetary Fund, Government in August 2015 imposed the ten per cent tax on sweetened beverages to raise in excess $10 million in year one and to reduce consumption of aerated drinks.
However, Minister of Health John Boyce reported last November that it was not having the desired impact.