More Tax Will Improve Health

February 14, 2014 Taxation in New Zealand

Soft drinksWELLINGTON – Taxing the sale of soft-drinks in New Zealand will significantly and positively affect peoples’ health, saving as many as 70 lives per year.

On February 14th the New Zealand Medical Journal released the results of new research, showing that enacting a new tax with a rate of 20 percent on the sale of all high-sugar drinks would simultaneously provide a significant new revenue stream for the government while actively improving the well-being of New Zealanders.

The researchers estimate that approximately NZD 257 million is currently spent each year in New Zealand on sugar-based drinks, and applying the tax to all sales would result in the collection of an extra NZD 40 million per year, or approximately NZD 30 million if the tax was not applied to artificially sweetened drinks.

Based on the current demand for sugary drinks and the price sensitivity of consumers, the tax would reduce the average daily caloric intake in New Zealand by as much as 0.2 percent, leading to a reduction in the occurrence of a wide spectrum of illnesses, especially type 2 diabetes, heart disease, and obesity, slashing the mortality rate in the country by more than 0.2 percent.

According to the research, the positive impact of the tax could be extended even further by using the collected tax revenues to fund nationwide health initiatives and public awareness programs, further improving health and reducing the occurance of diet based illnesses.

Photo by: Travis Juntara