In a bid to crack down on junk food and squeeze out revenue, the Kerala government has for the first time imposed a 14.5% “fat tax“ on burgers, pizza, tacos, doughnuts, sandwiches, pasta and bread-fillings sold at branded restaurants and food retail giants. Presenting the budget for 2016-17, finance minister Thomas Issac said the key concern was to shore up tax revenue, but officials said the levy was introduced for health reasons as well.
The state government expects an additional revenue of Rs.10 crore out of fat tax. Kerala ranks third after Punjab and Gujarat in terms of obese population, according to health experts.
However, the percentage of obese people is only 3-4% of the total population of the state.The percentage of obesity cases (people with 37.5 BMI) which require bariatric surgery is even less, and most of the overweight people have BMI in the range of 25-30, which does not require treatment. According to medical practitioners, taxing people may not be an ideal way to change their eating habits.
Dr K Gopakumar, associate professor, Gulathi Institute of Finance and Taxation, said that imposing fat tax can be perceived as a means of additional revenue mobilisation.
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