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Is A Fat Tax Necessary In Singapore?

A ‘fat tax’ is defined as a tax imposed on foods and drinks judged to be unhealthy and linked to the rising obesity rates. Fat taxes are generally encouraged by health advocates and dismissed by others as just another ridiculous bill passed by the nanny-state. Fat taxes have been implemented in countries such as Denmark and proposed in India, with varying degrees of success.

Before we get into why a fat tax should not be implemented, we should understand why a fat tax would even be considered in the first place. The need for a fat tax is usually debated when the government observes a trend of rising obesity among its population, typically the youths. When the youths of a country’s population has been observed to have an increase in obesity rates, the government may try to introduce laws or campaigns to encourage ‘healthy eating’. Denmark implemented the fat tax back in October 2011, on foods with a higher level of fats, with the intention of changing the Danes way of eating. However, as the taxes were low and were not drastic enough, the the government found that the tax was inefficient and thus removed it in late 2012. Similarly, when the state of Kerala in India proposed the introduction of a fat tax in 2016, the tax was met with large opposition.

The concept of a fat tax is generally flawed and is often seen as a slippery slope argument. It is commonly seen that a fat tax only changes the attitude of consumers, but does not alter the attitude of the corporations that manufacture and market these unhealthy products. However, even as consumers experience these higher prices, they will eventually get used to the new revised prices and resume their buying habits.

The question remains, why will a fat tax not work in Singapore? Imposing a tax on foods and drinks that have high fat and sugar content will cause consumers to think twice before buying the product, but Singapore just has too many food choices. The average consumer may be discouraged from buying a chicken burger at McDonalds but instead may head to the nearest hawker stall to purchase a plate of chicken rice, which turns out that the latter actually has 333 calories [Callaway, 2017] as compared to 272 in the burger. The Health Promotion Board introduced the Healthier Choice Symbol back in 2001, and can be seen on over 2600 different food products, ranging from 60 food categories such as snacks and drinks. This gives more of an ecosystem approach rather than the ‘blunt’ stick to the consumer, which encourages them to buy foods that are healthier rather than putting an additional price tag on unhealthy items. This just makes the idea of a fat tax be irrelevant in singapore’s context. Additionally, the ‘Healthy 365’ application created by the Health Promotion Board is another method of encouraging healthy eating among Singaporeans. The application encourages healthy eating by rewarding consumers with points when they purchase foods that are healthier, and in return consumers can exchange these points for vouchers at other food outlets. This application is well received among Singaporeans, with over 500 thousand downloads on Android alone.

Additionally, the concept of a fat tax in Singapore may not work due to the spending habits of teenagers. Due to the affluent nature of teenagers in Singapore, they do not spend money wisely [Seet, 2018] and will find that a fat tax in place, though increasing the prices of ‘unhealthy’ products, will still not be adequate enough to deter them from buying said products. Just like how cigarettes have been taxed in Singapore, the prices of cigarettes have been normalised and people do not seem to be bothered by the higher prices in Singapore, disregarding the fact that their fellow neighbours Malaysia and Indonesia not having these taxes. Teenagers are likely to get over the higher prices resulting from the fat tax in just a couple of years, and therefore the tax will be highly ineffective.

However, while we do find that a fat tax may not be the most feasible in Singapore, we should not discredit the opportunity it may have in reducing the obesity rates and encouraging healthier eating. The concept of a fat tax, in theory, is supposed to discourage the unhealthy eating habits of people, and should be able to allow consumers to change their lifestyle. However, one of the few reasons as to why it has been so ineffective is also due to the percentage of tax. Unlike the cigarette tax in Singapore which is rising to 10% as stated in 2018’s annual budget, Singapore cannot afford to place a 10% tax on unhealthy foods. [Ng, 2018] This will mean that the prices of foods in Singapore will increase and lead to more people being unable to afford meals in Singapore. The fat tax introduced in Denmark only slated a tax of 16 crowns per kilo of meat, which roughly translates to S$3.40. This increase in meat prices will draw large outrage in Singapore, especially when meat prices are already very high to begin with. If the fat tax is truly wanted to be successful, we must first weigh the pros and cons of having the tax, as well as the percentage taxed.

Let’s take a step back and review these points from a birds eye view. On one hand, the implementation of a fat tax will definitely discourage consumers from buying these products, but the concept of a fat tax may not necessarily be effective in Singapore. The fat tax will increase the prices of certain foods and drinks by a small percentage. In the short run, consumers may be deterred to buy these foods and drinks due to their higher prices, but will gradually return to the mindset of buying these items regularly once they get used to the higher prices. The idea of a fat tax in Singapore will not work because of the variety of foods we have in Singapore, and with some of our local delights being more unhealthy than fast foods, it just doesn’t make any sense to tax our national dishes. Furthermore, there are already alternative policies that Singapore has taken, such as the Healthier Choice Symbol, which are more effective than the tax. The idea of a tax just does not seem to be concrete enough for the Singapore government to implement. It is no doubt a high tax rate and a long timeline will definitely be able to reduce the obesity rates due to decreased consumption of unhealthy foods, but this will often result in a decrease in the welfare of the state, which may lead to lower productivity. Therefore, a fat tax in Singapore will not work in decreasing the amount of obesity cases among youths, due to the spending nature of teenagers today, as well as the low tax rates will have little to no impact in the long run.

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