Oct 29, 2014 health promoters have repeatedly proposed using economic policy tools, taxes and subsidies, as a means of changing consumer behaviour. Denmark scraps worlds first fat tax the washington post. The short tale of denmark s fat tax can be easily told. Effects of the danish saturated fat tax on the demand for meat and dairy products.
Denmark scraps its infamous fat tax after only one year. Denmarks food taxes a fat chance europe the economist. Effects of the danish saturated fat tax on the demand for. The measure, introduced a little over a year ago, was believed to be the worlds first socalled fat tax.
If shoppers still purchased butter, cheese, and other fatladen goodies like pizza, then the country got the revenue. After being voted for by an overwhelming majority of mps, the tax on saturated fat led to inflation, crossborder shopping, job losses and huge administrative costs. Denmarks tax received very little input from public health professionals during its formulation, while the food industry had substantial influence on the design and revision of the policy. Today various personal and corporate income taxes yield around two thirds of the total danish tax revenues. The fat tax and nutrition taxes in denmark the danish fat tax was presented as part of a tax reform package in 2009. Ever since the income tax was introduced in denmark via a fundamental tax reform in 1903, it has been a fundamental pillar in the danish tax system. Bbc, 2012, denmark to abolish tax on highfat foods british medical association, 2015, food for thought. It had very little effect on the consumption of saturated fat because danish shoppers downgraded to cheaper brands. It hit all food items with a saturated fat content. Donald marron, maeve gearing, and john iselin december 2015 donald marron is director of economic policy initiatives and institute fellow at the urban institute, maeve gearing is a research associate at the urban institute, and john iselin is a research assistant at the urbanbrookings tax policy center. The worlds first fat tax will soon also be the first to be abolished. Oct 07, 2011 denmark is the first country to introduce a fat tax on foods with high saturated fat content.
Companies complained that the tax was a bureaucratic nightmare. Denmark has decided to abolish its fat tax after barely a year, citing too many negative side effects hitting businesses. Previous investigations of the efficacy of such initiatives. A fat tax aims to discourage unhealthy diets and offset the economic costs of obesity a fat tax aims to decrease the consumption of foods that are linked to obesity. In dollars, the taxes will add 12 cents to a bag of crisps and 40 cents to the price of a burger. A fat tax is a tax or surcharge that is placed upon fattening food, beverages or on overweight individuals. If people do cut more meat out of their diet it may mean that farmers earnings will go down. For the guideline scenario, all individuals were assumed to have a sfa intake of.
Denmarks lawmakers thought they had a winwin through a tax on food with more than 2. A fat tax aims to discourage unhealthy diets and offset the economic costs of obesity. Denmark admits its fat tax failure adam smith institute. Today various personal and corporate income taxes yield around two thirds of the total danish tax revenues, indirect taxes being responsible for the last third. And earlier this week, with just a little more fanfare, denmark instituted an excise tax on foods high in saturated fat. Danish government publishes report on dividend withholding tax. Denmark s experience suggests one of the big challenges with regulating unhealthy foods. Why danes happily pay high rates of taxes best countries.
Oecd tax database 1st january 2019 vat revenue ratio the danish standard vat rate is 25. The fat tax introduced in 2011 reduced the danish consumption of taxed products by 10% to 15% in the first nine months, although the demand partially shifted from high price supermarkets to discount stores. Apr, 2016 modelling the effect of the changes in diet on health outcomes suggests that the saturated fat tax made a positive, but minor, contribution to public health in denmark. The publication is an introduction to the danish tax system intended for newcomers to denmark and nondanish speakers who are not yet familiar with the system.
Of the many proposals to reverse the obesity epidemic, the most contentious is the use of pricebased interventions such as the fat tax. Body blow for butterloving danes as fat tax kicks in. Special taxes in the financial sector the question of additional taxes on financial institutions became prominent following the financial crisis of 20072008. The danish fat taxeffects on consumption patterns and. Nov, 2012 the danish government announced saturday it would abolish the fat tax as part of budget negotiations there. Denmark has introduced what is believed to be the worlds first tax on foods containing saturated fat.
The topic has generated much public and political discussions in recent years with many proposals presented, some of which have been implemented in countries legislations. The controversial tax, designed to improve the health of danes by discouraging consumption of fatty foods, was opposed by farmers and food companies and was unpopular among consumers. A proposed sugar tax that was meant to be introduced in 20 has also been. Denmark s so called fat tax on foods high in saturated fats has been repealed by the danish parliament only one year after being introduced. The shipwreck of denmarks notorious fat tax should have served as a. Oct 04, 2011 and earlier this week, with just a little more fanfare, denmark instituted an excise tax on foods high in saturated fat. Vatgst refers to value added taxgoods and services tax source. See ey global tax alert, danish tax authorities suspend all claims for refunds of dividend withholding tax, dated 27 august 2015.
The objective of this paper is to make an effect assessment of this tax for some of the product categories most. The danes also had a tax on soft drinks in place for 80 years before repealing it in 2014. In 2011 denmark introduced a tax on saturated fat in food products, the first country in the world to do so. The danish fat taxeffects on consumption patterns and risk. Eu commission launches inquiry into danish fat tax by niamh michail 06feb2015 last updated on 06feb2015 at 12. Fat taxes have become part of the policy response to obesity in a number of countries. In a country known for butter and bacon, denmark s new tax is a body blow. Fat tax in denmark is repealed after criticism the new. Danes who go shopping today will pay an extra 25p on a pack of butter and 8p on a packet of crisps, as the new tax on foods which contain more than 2. Nov, 2012 citing a harmful effect on businesses and consumer buying power, lawmakers in denmark have repealed the socalled fat tax, which was charged on foods high in saturated fats, after just one year. The effects of the danish saturated fat tax on food and. Denmark s new fat tax october 2011 denmark has introduced a new fat tax. Denmark is one of the worlds largest bacon and pork producers.
Why fat taxes wont make us thin journal of public health. The objective of the present paper is to investigate the effects of the tax on consumers intake of saturated fat within three different types of food product group. Nov 11, 2012 israel also is weighing a junk food tax, and in the u. Why it did not survive article pdf available in european journal of clinical nutrition 692 october 2014 with 1,493 reads how we measure reads. Many danes switched to cheaper brands or went over the border to sweden and germany to do their shopping. The economic effects of the fat tax were almost invariably negative. Substituting polyunsaturated fat for saturated fat. A related idea is to tax foods that are linked to increased risk of. The danish government implemented this tax in an effort to reduce the populations consumption of fatty foods, as denmarks overweight and obesity rates have steadily. Denmark cancels fat tax and shelves sugar tax because of.
Danes are worried that the tax has increased food bills which was the point of the tax. Denmarks fat tax is being opposed by the countrys food industry, especially the meat producers. Denmark is the first country to introduce a fat tax on foods with high saturated fat content. The new tax is imposed on food containing more than 2. Ana kasparian and cenk uygur discuss on the young turks. Under an antimoney laundering measure, an individual leaving or entering denmark with more than eur 10,000 in cash or bearer instruments must report these to customs. In this context, denmarks fat tax can offer valuable evidence despite the fact that it was only in effect for 15 months.
Previous investigations of the efficacy of such initiatives in altering consumption behavior yielded contradictory findings. For the fat tax scenario, we assumed the tax would have the same effect that it had in denmark. It pushed danes to shop in other countries for fattier foods. The negative consequences of the danish experiment could not have been. The fat tax is 16 kroner per kilogram of saturated fat. For example a tax on saturated fat was imposed in denmark in 2011 and then later removed in 2012. Whether these amounts will discourage purchases remains to be seen.
To predict the fattax scenarios agespecific mean intake of sfa, we multiplied the reference scenarios agespecific mean intake by the agespecific sfa consumption change that was observed in denmark after the introduction of a fat tax. As the first country in the world, denmark introduced a tax. Modelling the effect of the changes in diet on health outcomes suggests that the saturated fat tax made a positive, but minor, contribution to public health in denmark. What the world can learn from denmarks failed fat tax the. Unless and until more data emerge, the effectiveness of the worlds first fat tax will have been buried under its own controversy. Aug 26, 2015 in 2011 denmark introduced a tax on saturated fat in food products, the first country in the world to do so. Nov 21, 2012 denmarks so called fat tax on foods high in saturated fats has been repealed by the danish parliament only one year after being introduced. This paper summarises the recently introduced fat tax in denmark, which came into force on 1 october 2012, and discusses some of the consequences of introducing the tax. Denmark will repeal its fat tax after it showed an unintended consequence. Taxation in denmark consists of a comprehensive system of direct and indirect taxes. The danish government is applying a surcharge to foods with more than 2. Should denmark decide to have another fat tax, its likely that it would have to wait until after the european commission has determined whether. Though denmark repealed a fat tax in 2012, fiscal policies on food consumption can have positive impact. The failure of denmark to maintain their saturated fat tax for more than 15 months shows the challenges of implementing health related food taxes.
Citing a harmful effect on businesses and consumer buying power, lawmakers in denmark have repealed the socalled fat tax, which was charged on foods high in saturated fats, after just one year. Denmark has since announced that it will abolish its hated fizzy drinks tax and is cutting beer duty for the same reason it dropped the fat tax to promote growth and employment. Denmark has taxed saturated fats since october 2011, and the experiment has been a failure. The shipwreck of denmarks notorious fat tax should have served as a lighthouse for politicians for a generation. Therefore, we derived the age and sexspecific sfa consumption change that was observed in denmark after the introduction of a fat tax 41, corresponding to a sfa intake reduction ranging from 0.
The danish government has said it intends to abolish a tax on foods which are high in. For politicians, however, denmark s fat tax fiasco is a valuable reminder of how economically inefficient, regressive and unpopular such policies are. Denmark china new tax treaty june 2012 denmark and china signed on june 16, 2012 a new protocol to the existing 1986 tax treaty between the two countries. Nov 10, 2012 image caption the tax increased the cost of butter and other foods with more than 2. To date, the only other scientific study examining the danish fat tax jensen and smed, 20 found that the sale of butter, butter blends, margarine and oils decreased by 1015% during the first nine months of the fat tax. No restrictions are imposed on payments to and from denmark, although the danish tax authorities must be informed of certain transactions. On denmarks fat tax food politics by marion nestle. Denmark cancels fat tax and shelves sugar tax because. In october 2011, denmark passed the worlds first fat tax a tax on butter, milk, cheese, pizza, meat, oil and processed food that contained more than 2. Denmarks fat tax disaster the proof of the pudding. The skinny on denmarks fat tax denmarks lawmakers thought they had a winwin through a tax on food with more than 2. Denmark introduced a wideranging tax on saturated fat in october 2011 before repealing it in january 20. The european commission has launched an inquiry to determine whether denmarks shortlived fat tax constituted illegal state aid for manufacturers who did not have the tax levied on their products. Mexico introduced a sugary drinks tax of around 10 per cent in january 2014.
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