A tax grab in all but name
So far the sugar tax is nothing more than a tax grab by the Progressive Labour Party.
In Parliament on Friday, I asked questions of the finance minister, Curtis Dickinson, in regards to the amount raised since the inception of sugar tax on October 1, 2018 and the increase in government spending, focusing on health education and health-related initiatives.
The minister, in answering the questions, informed the House of Assembly that since its inception, more than $5.4 million has been raised through the increase in duty on certain sugary items; first at 50 per cent and then increased to 75 per cent in April 2019.
This is a significant amount of money that has been raised by taxing food items and increasing the cost of foodstuffs on the island.
• When asked how much the sugar tax had contributed to the increased cost of food and the cost of living, the minister remarked that this would be engaging in speculation
• When asked if he believed the sugar tax is a regressive and unfair tax, the minister said he had not thought about it
• When asked to provide details of the increase in government spending, including the specific allocation to health, education and related areas that the sugar tax revenue has facilitated since its implementation, the minister replied that funding was not allocated to sugar tax, health-related programmes in 2018-19 and, it appears, the same goes for 2019-20
So, in the 16 months since the inception of the sugar tax, no significant, health-related initiatives have been launched, the Government is unable to provide a dollar amount spent on the promised programmes, but more than $5.4 million has been raised through increased taxation!
This is not putting Bermudians first!
Then, in a weak attempt to show the tax is working, the Minister of Finance and the Minister of Health use dated information, which they have taken out of context, showing that sugary-drink consumption has declined since 2014.
While it is correct that sugary-drink consumption has declined, the sugar tax came into effect only in October 2018, so using this study is not a reinforcement of this government policy!
The consumption of sugary drinks in Bermuda, and in other countries such as the United States and Canada, has decreased, and further back than in 2014, but it is a very difficult argument to make that it is because of a sugar tax, especially a tax that came into effect only in 2018.
In Canada, soft drink sales have decreased as far back as 2004 when between that year and 2015 per capita soft drink sales have fallen 27 per cent.
And what happened to Canada’s BMI over that time?
Adult BMI increased, so the evidence contradicts claims that a reduction in soft drink consumption would cause a decline in BMI. (Source: “Sweet Nothing” November 2017.)
This study also shows that consumers make decisions based on behavioural, biological, societal and geographic reasons; thus, taxation, even at this very high level, will not be effective in changing food-purchase choices.
Here in Bermuda, the sugar tax has proven to be regressive; lower-income families will spend a greater portion of their income on food. And it is also an unfair tax in that it punishes the healthy for having an occasional soft drink, chocolate bar or for using protein powder.
Sadly, a well-intentioned initiative to reduce obesity has to date resulted only in a tax grab for the PLP, while Bermudians have been burdened with increased taxation by the Government in many areas, a declining economy and a lack of opportunity.
Studies have shown there are much more effective ways to tackle obesity, such as portion control, reformulation, high-calorie food availability, weight-management programmes, parental education and school curriculum to name a few.
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