Union Finance Ministry has withheld its proposal to levy sin tax on sugar due to few concerns.
What is a sin tax?
A sin tax is levied on specific goods and services at the time of purchase.
These items receive the excise tax due to their ability to be harmful or costly to society.
Applicable items include tobacco products, alcohol, and gambling ventures.
Sin taxes seek to deter people from engaging in socially harmful activities and behaviours, and also provide a source of revenue for governments.
Which other countries have levied such sin taxes?
Mexico, Norway, Australia are some countries which have taken initiatives to tax harmful food and beverages including junk foods.
These countries focus on the long term impact of such disastrous commodities and slap heavy taxes to deter people from engaging in harmful activities.
Recently, Qatar government hiked taxes on altruistic grounds to discourage unrestrained consumption of sugar.
This decision was taken when Qatar became of the fattest countries on earth with half of its population obese and 17% among them diabetic.
What are the concerns in levying sin tax in India?
India being the diabetics’ capital of the world is in dire need of a sin tax to reduce consumption of sugar intake by its citizens.
This sugar tax can’t be plainly levied, as there is a significant population of farmers depending on the sugarcane for their livelihood.
Also, sweets are a significant part of the staple meals in many parts of the country and making sugar costly will shake up their food patterns abruptly.
Therefore, the Indian government should take appropriate steps to support its citizens as well as sugar coat the proposed sugar cess as diabetes tax.
