Junk Food Tax

With the government in need of money, maybe a "junk food tax" measure is a better source of revenue compared to imposing taxes on items such as telecommunications-related products or services and barter trade. However, the imposition of such tax measures should result to increased access to food and beverage that meet nutritional standards for Filipinos instead of causing food insecurity to a large number of people, especially the poor.

The COVID-19 pandemic has proven to be a challenging time for all of the countries of the world in terms of economics and finances. The implementation of lockdowns, travel bans and other measures that aim to prevent the further spread of the disease took its toll on the economies of the world and livelihoods of many. Most countries entered recession, as economic activity has been severely limited and consumer spending has seen a drastic decrease. With a number of enterprises either shedding a portion of their workforce in order to save money or, worse, closing down for good, millions of people have lost their jobs, which are further complicated by limited work and business opportunities.

The situation is no different in the Philippines, where varying levels of community quarantine have been in place since March. The pressure on the government to re-open the economy has become greater, as there is a need for Filipinos, most of whom already having their finances stretched to the limit, to come back to work and begin spending again, and for businesses to start selling products or offering their services once more but on a limited scale to provide income to workers and spur trade and consumption. The State is using both taxpayer money and funds borrowed from creditors such as the Asian Development Bank and Japan to finance COVID-19 medical and non-medical response, especially financial assistance for those affected by the lockdowns and job losses, and loans for businesses to be able to start operating again.

Recently, Senator Sherwin Gatchalian floated the idea of having a "junk food tax" as a way for the government to generate revenues that it will use for COVID-19 response. During an interview over radio station DZBB, Gatchalian said the proposed tax measure will discourage people from having heavy consumption of snacks that have little or lack nutritional value, as it will increase the prices of junk food. He added that it is right time to implement a "junk food tax" amid the COVID-19 pandemic and the government's need for additional funds.

I agree with the idea of having a "junk food tax" but on the following conditions:

  1. There should be a clear definition of what "junk food" is and what food and beverage types would fall under such category. The proposed tax measure should set the science-based nutritional standards that will be followed for a particular food or beverage to be considered as "junk food." This can be done by obtaining inputs from the Department of Health-National Nutrition Council, Department of Science and Technology-Food and Nutrition Research Institute, food technologists and nutritionists.

  2. The government should provide incentives for agribusinesses, food manufacturers, MSMEs and restaurants to produce food and beverage that meet Filipino nutritional needs. Such incentives can include government loans or grants and tax breaks or discounts. Doing so will not only reduce production costs involved but it will also encourage more enterprises to engage in the production of affordable and accessible food and beverage that meet the dietary needs of Filipinos.

  3. There is a need to strengthen food and nutrition education among Filipinos to help them come up with better food choices. The National Nutrition Council should take the lead in the effort, with the Department of Education coming up with the design for classroom-based instruction and the Presidential Communications Operations Office in charge of mass media and widespread information dissemination. It is important for Filipinos, especially the masses, to be properly informed about food and nutrition, and why making the right food choices is vital in maintaining good health.

  4. An important element of making the right food choices is food accessibility, availability and affordability, which can only be attained through a mix of factors. First, food can become accessible, available and affordable if the value and supply chains are free from interference, especially from natural or artificial supply gaps, and, in the case of agricultural produce, the involvement of a large number of middlemen. Individual purchasing power is another factor in food accessibility, availability and affordability, as those with higher purchasing power have greater access to more nutritious food and beverage. 

 

Food supply and value chains can be improved by implementing food security-related measures such as the construction of strategically located storage and marketing facilities, and the empowering of farmers and fishermen, forming a large group such as a cooperative or community corporation, to take over roles being performed by middlemen such as marketing and transport, and production and post-production activities that will enable them to be directly connected to wholesalers and/or retailers and/or consumers. On the other hand, individual purchasing power can be increased by increasing an individual's income, which can be possible through economic reforms that will create new job and business opportunities and reduce poverty.

For now, I hope that Senator Gatchalian and other proponents of having a "junk food tax" will examine things carefully before pushing through with it. With the government in need of money, maybe a "junk food tax" measure is a better source of revenue compared to imposing taxes on items such as telecommunications-related products or services and barter trade. However, the imposition of such tax measures should result to increased access to food and beverage that meet nutritional standards for Filipinos instead of causing food insecurity to a large number of people, especially the poor.

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About the Author
Benedict is an agricultural economist, academician and writer. He has gained experience and expertise in various fields of economics, business, political science and public relations after through professional ventures in the academe, and in the public and private sectors. He has authored or co-authored key publications on topics ranging from agriculture and food security to global affairs and politics.
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