Considerations for modelling a broad food tax in the Philippines and other low-income and middle-income countries

Abstract

Fiscal policies to improve diet are a promising strategy to address the increasing burden of non-communicable disease, the leading cause of death globally. Sugar-sweetened beverage taxes are the most implemented type of fiscal policy to improve diet. Yet taxes on food, if appropriately structured and applied across the food supply, may support a larger population-level shift towards a healthier diet. Designing these policies and guiding them through the legislative process requires evidence. Equity-oriented cost-effectiveness analyses that estimate the distribution of potential health and economic gains can provide this critical evidence. Taxes on less healthy foods are rarely modelled in low-income and middle-income countries.We describe considerations for modelling the effect of a food tax, which can provide guidance for food tax policy design. This includes describing issues related to the availability, reliability and level of detail of national data on dietary habits, the nutrient content of foods and food prices; the structure of the nutrient profile model; type of tax; tax rate; pass-through rate and price elasticity. Using the Philippines as an example, we discuss considerations for using existing data to model the potential effect of a tax, while also taking into account the political and food policy context. In this way, we provide a modelling framework that can help guide policy-makers and advocates in designing a food policy to improve the health and well-being of future generations in the Philippines and elsewhere.

Framing health taxes: learning from low- and middle-income countries

“…Modelling studies and evaluations from other countries can help supply these arguments. 42 Similarly, learning from and citing the experience of regional peers can help establish precedent and credibility for nascent health tax proposals. Efforts to benchmark health taxes could be strengthened and expanded to accelerate progress; for example, Tobacconomics produces a cigarette tax scorecard.…”

Political Economy Analysis of Health Taxes (Tobacco, Alcohol Drink, and Sugar Sweteened Beverage): Case Study of Three Provinces in Indonesia

“…This could include subsidies for healthier alternatives, incentives for cessation(68–70), and regulatory and fiscal support for industries producing healthy products (71). Furthermore, health taxes often lead industries to reformulate their products to avoid the tax (72, 73), which could be an important tax design consideration(74). Therefore, health tax revenue can also be allocated to enable sub-national governments to promote and ensure proper product reformulation for healthier alternatives by engaging local enterprises.…”