Budget FY25: Sugar less sweet as fight against obesity gains pace
Sugar and salt are essentially white poisons, so we should discourage their consumption by any means," a public health expert told TBS
A rise in VAT to a flat 15% and supplementary duty on some sugary juices has been included in the proposed national budget for the fiscal year 2024-25.
Carbonated beverage manufacturers will have to pay a 5% tax on turnover, up from the 3% minimum.
Sugary food items will see a higher rise. The minimum tax rate on cakes, biscuits, chocolates, jams and jellies, juices and ice cream is set to rise to 5% from the existing 0.6%.
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The National Board of Revenue (NBR) proposed the higher taxes on food and beverage products containing sugar, which was met positively by health experts.
"It would be a good move if the government increases taxes to limit the consumption of sugar-sweetened beverages, as these items are harmful to health," Professor Benazir Ahmed, a public health expert, told TBS earlier.
"Sugar and salt are essentially white poisons, so we should discourage their consumption by any means," he said.
"Sugar-induced items are mostly responsible for metabolic disorders and hyperlipidemia, also known as high cholesterol, which also have adverse effects on the brain and skin. These items directly increase sugar levels in the human body, and insulin fails to regulate them," Benazir explained, adding that the government should promote the availability of natural fruits, which are beneficial for the human body.
According to a study titled "Underweight, overweight or obesity, diabetes, and hypertension in Bangladesh, 2004 to 2018," published on 30 September 2022, the prevalence of obesity has nearly tripled among women and increased by 1.5 times among men in the country over the past 14 years due to sedentary lifestyles and dietary changes.
The study also found that the prevalence of diabetes has been on the rise, increasing from 11% to 14% in both men and women.
Professor Dr Rumana Huque, a public health economist, said, "It would be a positive step if the NBR imposes taxes on sugar-sweetened beverages. This measure would serve two purposes: revenue generation and improvement of public health."
In the FY24 budget, the government increased the minimum tax for carbonated beverage manufacturers from 0.6% to 5%.
However, following significant lobbying efforts from various stakeholders, the government eventually reduced it to 3%.
In FY23, the government collected Tk1,482 crore in revenue from this sector. However, following the tax increase in FY24, sales declined, leading to a 30% reduction in revenue from July to March of the current fiscal year.
According to the Bangladesh Beverage Manufacturers Association, with all import taxes, value-added tax, and other taxes, the total tax incidence on carbonated beverages currently exceeds 48%.
According to Business Initiative Leading Development (BUILD) tax on beverage products in India is 40%, Sri Lanka 29%, Nepal 39% and Bhutan 30%.
While experts expressed approval for the proposed tax increase, they said simply raising the tax would not suffice to meet the objective of reducing beverage consumption.
