The state has also imposed a green tax, to discourage use of vehicles over 10 years old
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Additionally, the state government will also levy a green tax on public and private vehicles over 10 years and 15 years old, respectively, Finance Minister T M Thomas Isaac said on Friday. He did not specify how much this levy would be.
These measures are expected to fetch the Kerala government Rs 61,895.62 crore in tax revenue this financial year vis-à-vis Rs 53,003.42 crore last year, the minister said. But the growth in tax revenue is just about 17 per cent, tax experts said, implying there is still a deficit of eight percentage points in comparison to its overall target of 25 per cent.
The fat tax, in particular, government sources say, is intended to check obesity, a trend that is rapidly gaining ground in the state. A 2010 study by Vivekananda High School, Bellary, stated that among high school students in the state’s capital Thiruvananthapuram, almost 12 per cent were overweight, while 6.3 per cent were obese.
Thomas specified that food items, including pizzas, burgers, tacos, doughnuts, sandwiches, pasta and burgers sold in upscale restaurants would fall under the fat tax ambit.
It may be noted that fat tax had been imposed by countries like Denmark and Hungary earlier to fight obesity. But, Denmark chose to scrap it eventually, after losing the war on growing girth.
This January, the Bihar government had imposed a 13.5 per cent value added tax on items such as samosas, salted peanuts, sweets and a few branded snacks, to make up for the revenue loss on account of the ban on liquor in the state.
The Kerala government, meanwhile, also imposed a five per cent tax on packaged wheat products such as atta, maida, sooji and rava. The state government is expecting additional revenue of around Rs 50 crore from this initiative alone, sources said.
Tax for packaged Basmati rice has also been increased to five per cent, which is expected to bring Rs 10 crore into government coffers.
Coconut oil, imported into the state, and washing soaps will become expensive by five per cent; so will garments, which will see a levy of two per cent.
Green light for ecotax
The new green tax comes in the wake of the National Green Tribunal Circuit Bench’s decision in May to ban diesel vehicles 10 years and above in the state, with a capacity of 2,000 cc.
For goods vehicles of over 20,000 kilos in weight, tax will be increased by 10 per cent, after a gap of nine years. This will bring in Rs 20 crore additional revenue, Kerala government sources said.
Fat, so? The skinny on global fat tax
Taking a leaf out of tobacco’s book to curb market activity that generates negative externalities, many governments have introduced financial penalties known as fat tax, soda tax, sugar tax and soft drink tax, etc. Some have had to withdraw such measures after popular protests, others boast of a healthier population:
Japan
‘Metabo’ law involves conducting an annual waist measurement of people aged between 40 and 75, which is administered by companies and local authorities
Denmark
It withdrew ‘fat tax’ and ‘soda tax’ after protests from people
France
Sugary drinks are up to 3.5 per cent more expensive due to soda tax
Mexico
Sales of sodas have declined by more than 10 per cent after tax on carbonated drinks was introduced despite lobbying and protests
Norway
It has a general tax on all refined sugar products
United Kingdom
A sugar tax on the soft drinks is proposed come into effect in 2018
United States
Some cities have ‘soda tax’ and ‘sugar tax’ but there is no pan-US tax on fattening products
After Bihar's tax on samosas, Kerala 'weighs in' on fat tax on junk food
The state has also imposed a green tax, to discourage use of vehicles over 10 years old
The state has also imposed a green tax, to discourage use of vehicles over 10 years oldAdditionally, the state government will also levy a green tax on public and private vehicles over 10 years and 15 years old, respectively, Finance Minister T M Thomas Isaac said on Friday. He did not specify how much this levy would be.
These measures are expected to fetch the Kerala government Rs 61,895.62 crore in tax revenue this financial year vis-à-vis Rs 53,003.42 crore last year, the minister said. But the growth in tax revenue is just about 17 per cent, tax experts said, implying there is still a deficit of eight percentage points in comparison to its overall target of 25 per cent.
The fat tax, in particular, government sources say, is intended to check obesity, a trend that is rapidly gaining ground in the state. A 2010 study by Vivekananda High School, Bellary, stated that among high school students in the state’s capital Thiruvananthapuram, almost 12 per cent were overweight, while 6.3 per cent were obese.
Thomas specified that food items, including pizzas, burgers, tacos, doughnuts, sandwiches, pasta and burgers sold in upscale restaurants would fall under the fat tax ambit.
It may be noted that fat tax had been imposed by countries like Denmark and Hungary earlier to fight obesity. But, Denmark chose to scrap it eventually, after losing the war on growing girth.
This January, the Bihar government had imposed a 13.5 per cent value added tax on items such as samosas, salted peanuts, sweets and a few branded snacks, to make up for the revenue loss on account of the ban on liquor in the state.
The Kerala government, meanwhile, also imposed a five per cent tax on packaged wheat products such as atta, maida, sooji and rava. The state government is expecting additional revenue of around Rs 50 crore from this initiative alone, sources said.
Tax for packaged Basmati rice has also been increased to five per cent, which is expected to bring Rs 10 crore into government coffers.
Coconut oil, imported into the state, and washing soaps will become expensive by five per cent; so will garments, which will see a levy of two per cent.
Green light for ecotax
The new green tax comes in the wake of the National Green Tribunal Circuit Bench’s decision in May to ban diesel vehicles 10 years and above in the state, with a capacity of 2,000 cc.
For goods vehicles of over 20,000 kilos in weight, tax will be increased by 10 per cent, after a gap of nine years. This will bring in Rs 20 crore additional revenue, Kerala government sources said.
Fat, so? The skinny on global fat tax
Taking a leaf out of tobacco’s book to curb market activity that generates negative externalities, many governments have introduced financial penalties known as fat tax, soda tax, sugar tax and soft drink tax, etc. Some have had to withdraw such measures after popular protests, others boast of a healthier population:
Japan
‘Metabo’ law involves conducting an annual waist measurement of people aged between 40 and 75, which is administered by companies and local authorities
Denmark
It withdrew ‘fat tax’ and ‘soda tax’ after protests from people
France
Sugary drinks are up to 3.5 per cent more expensive due to soda tax
Mexico
Sales of sodas have declined by more than 10 per cent after tax on carbonated drinks was introduced despite lobbying and protests
Norway
It has a general tax on all refined sugar products
United Kingdom
A sugar tax on the soft drinks is proposed come into effect in 2018
United States
Some cities have ‘soda tax’ and ‘sugar tax’ but there is no pan-US tax on fattening products
T E Narasimhan & Gireesh Babu
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