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Higher taxes on junk food! eat junk, pay more

June 03, 2010 By: Bridge to Bhutan Category: Environment, Health

Koka, Wai Wai, Coke, Lays potatoes and Rockbee connoisseurs will have to find a GNH food alternative

Bhutanese consumers could soon end up paying higher rates for alcohol and foods classified as junk like carbonated drinks, potato chips, chocolates etc.

The Ministry of Finance along with its Department of Revenue and Customs are in the process of drawing up a list of alcohol and junk food products for taxation based on cabient instructions.

The Prime Minister Lyonchen Jigmi Y. Thinley in a press conference said the government had identified a list of food items as junk that would impair the health of especially children and so would be taxed higher. He gave the example of soda water.

“The new taxation policy structure, which Lyonpo Wangdi Norbu will be reporting to the National Assembly, has differentiated what constitutes healthy consumer items and what constitutes items that will accelerate the kind of problem for Bhutan associated with life style diseases,” said Lyonchen.

“When Lyonchen has said that taxation should be there on these products to discourage their use, the tax will have to be more than moderate to do so,” said Nima Wangdi, finance ministry’s director general.  On the taxation structure the DG said the ministry had options of up to 150% tax.

The Director General said that all manufactured and processed food items that are addictive, fatty, unhealthy, having harmful chemicals like mono sodium and too much sugar would fall under the category of junk food.

He said a tentative list which could also change have so far included items like all cold drinks like Pepsi, Coco Cola; all potato chips like Lays, noodles like Maggi, Koka, Wai Wai, high sugar chocolates and soda water.

The Revenue and Customs Director Choyzang Tashi said, “Some junk food products mainly from Thailand and Bangladesh will also be on the list.”

On alcohol, the DG said that tax would have to be imposed on alcohol being produced in the country and also foreign liquor being imported into Bhutan.

However restaurants will not have to worry as the DG said that whatever they cook, restaurants already paid a Bhutan sales tax and so they would not be taxed on the kind of food they cooked.

He also said the fresh food and meat like those available at the farmers market would not be affected.

However finance ministry officials are already having some problems defining junk food.

“In the detailed list of customs we have no provisions or section of junk food and so we will have to come up with an exact definition but that may also be difficult as one man’s junk may be another man’s food and there would be differences of opinion,” said Nima Wangdi.

He said that there is also a high possibility that due to categorization problems, some food which may not necessarily be junk food but cannot be segregated could also come in the list. The ministry is also yet to set out how exactly would junk food be classified.

The DG also said that the finance ministry would not be taking any advice from doctors or from diet experts but would come out with the final list based on common sense.

On the implementation process, the final list is expected to be ready within a month. “We can implement these taxes either after this session or by the next session,” said the DG.

Choyzang Tashi said that once the list is in place, revenue and customs would check for all imported junk food at the borders and entry points into Bhutan and accordingly levy taxes.

There will also be no public consultation on the issue on deciding the list or the amount of taxes.

The prime minister said that this decision is in line with the philosophy of GNH promoting healthier lifestyle and emotional and physical well being of people. He said the government was also doing this through various policies like EDP and others that subscribe to GNH and that also avoid cultural and environmental destruction. He also gave the example of the tobacco ban.

(Source: Tenzing Lamzang, Business Bhutan)

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