Bulgaria mulls junk food tax as of 2016

By bne IntelliNews October 21, 2015

Bulgaria's healthcare minister Petar Moskov and sports minister Krasen Kralev have presented a draft law on additional taxation of foods with a high content of salt, sugar, caffeine and hydrogenated vegetable oils, as well as carbonated drinks. The new indirect tax will have a rate of between 3% and 78% of the final price and will be paid by the manufacturers and importers of the respective products.

The objective of the tax is to stimulate manufacturers to use more healthy recipes and to encourage the consumption of healthy food. According to Moskov, Bulgaria ranks first in the EU in terms of mortality from cardiovascular diseases, due to the excessive use of salt and sugar. Moreover, every third child in the country suffers from obesity.

The new tax is planned to be imposed as of next year. It is expected to generate BGN150mn (€76.7mn) in government revenue. A public council will decide on how to spend the revenues – 20% of which will go to the renovation and construction of school gyms, 20% will be directed to changing the food in schools to fruits and vegetables, and the remaining 60% to the prevention and treatment of diseases caused by junk food.

Another legislative change envisages a ban on radio and TV ads for unhealthy foods for children.

Bulgaria’s independent economic policy think tank IME claims that in other countries with junk food taxes the consumption of unhealthy food has not declined, while the prices of some related products have gone up and the expenditures on health have not changed. In addition, the tax consistently did not meet its planned revenue targets.

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