Prof. Zoltán Vokó MD, MSc, PhD, DSc. Department of Health Policy and Health Economics, Eötvös Loránd University Syreon Research Institute

Transcription

1 Prof. Zoltán Vokó MD, MSc, PhD, DSc Department of Health Policy and Health Economics, Eötvös Loránd University Syreon Research Institute

2 Critical factors in the development of the Hungarian health related food tax Challenges and failures Possibilities of health related food tax Special features of the Hungarian health related food tax Details of the Hungarian health related food tax Public health and fiscal risks of the introduction of the tax Results of the short term monitoring of the introduction of the tax Conclusions

3 MoH was called for developing ideas and means to raise revenues for handling the financial crisis of health care Some solution to the human resource crisis was urgent In the years of the financial crisis and austerity reallocation of the resources of the national budget favouring health care was definitely opposed by the ministry of finance Thus the primary cause was financial, mutual interest of MoF and MoH

4 Public health policy was put higher on the health agenda by the new government that came into power in 2010 The public health community strongly supported the introduction of the tax Positive national and international experience with the tobacco taxation policy A champion in the government The general political context was supportive: the whole taxation system was stirred towards more consumption and less income based setting adjustment of the share of burden of taxation by increasing the taxation of the most profitable industries Society (attitude, culture) was ready for the changes

5 When the opportunity came the time was very limited to prepare, discuss, negotiate the draft law (though as in the case of smoke free legislation WHO could bring some available evidence) Limited professional capacity In the last moment the MoF could withdraw earmarking (nevertheless there is a debate about the advantages and disadvantages of earmarking) No funds were available for monitoring (finally WHO Euro provided some resources in the framework of the BCA) Heavy pressure on the politicians by the industry (as a consequence the tax rate was lower than planned on SSBs), increasing the risk of blocking the pass through effect and the behavioural change

6 Taxes on individual nutrients: Added sugar Saturated fat Salt etc. Taxes on combinations of nutrients (nutrient profiling) Taxes on categories of foods Sugary soft drinks (SSBs or SSDs) combination was used in Hungary source: Mike Rayner

7 Mytton OT, et al. BMJ. 2012;344:e2931.

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9 High added sugar or salt content and energy drinks are targeted Definitions based on the Common Nomenclature of Goods (customs tariff headings) Specific threshold values for added sugar and salt to support reformulation and change of behaviour, for example: soft drinks (2020), fruit and vegetable juice with less than 25% fruit content or less than 50% milk content (2009) if: added sugar exceeds 8 grams of sugar / 100 ml contains metyl xantin 1mg/100mL and taurin 100mg/100mL or more than 15mg/100mL metyl xantin

10 Only prepacked products to reduce administrative and control costs criticised as unfair Fine tuned in recent years syrups and concentrates, jams with little fruit content, sugar sweetened cocoa powder, alcopops and flavoured beer were added coffein changed to metyl xantin, energy drinks without taurin but high metyl xantin content were added, too fortified wine, vermouth, fermented beverages (e.g. cider) and spirits to be added on 1 January 2015

11 The taxable person is the person, organization who sells the taxable product in the domestic market for the first time The tax must be indicated on the invoice, accounting document

12 Specific unit tax instead of ad valorem penalise cheap products to reduce the opportunity to switch to cheaper brands incentive to consume higher quality products risk of erosion of the real value of the tax if tax rates are not adjusted for inflation in case of alcohol it will depend on the alcohol content

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14 No pass through effect because of the low tax rate on SSBs The consumption pattern does not change (price elasticity was not well established) % change in quantity demanded % change inprice e.g. on soft drinks the tax is less than 2% The consumption pattern changes in an unwanted manner (e.g. soft drinks substituted by alcohol) Health inequality would increase if the message does not go through among less educated persons Possible failure or lack of other supportive interventions (i.e. legislation on public catering)

15 Many small enterprise may go bankrupt The expected revenue could not be generated The administrative and control costs would be too high as compared to the revenue

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17 Proportion (%) Energy drink Soft drink Snack Sweets

18 soup powders, condiments snacks sweets flavoured beer alcopops soft drinks energy drinks Proportion of persons detecting price increase due to the tax (%)

19 Proportion (%) Energy drink Soft drink Snack Sweets But: the population did not know exactly which products were subject to the new tax, approximately 27% of them have not heard about the health related food tax

20 price health consciousness Proportion (%) Energy drink Soft drink Snack Sweets

21 Snacks Sweets Odds ratio of reduction (95% CI) good bad good bad perceived health perceived health

22 95% of the expected revenue (20 billion HUF) was realized in 2012 Price increase by the manufacturers: The average price of manufacturers products subject to the tax increased by 29%, and the sales of these products decreased by 27% according to the manufacturers Reformulation 40% of the responding manufacturers changed the formula: 30% of them totally removed the harmful ingredient, 70% decreased the quantity Economic effect on the industry Balance sheet data of big payers of NETA improved from 2010 to 2011 (tax introduced in September 2011)

23 financial austerity provided the opportunity the need for a champion and dedicated professionals the tax seemed to be successful both financially and from the public health perspective on the short run monitoring would be a must (no detailed information about the substitution for example, but it would be assessed in the frame of current WHO BCA as well as its impacts on different socioeconomic groups) to increase and sustain its effect it should be supported by comprehensive public health interventions (e.g. effective health communication, etc.) although large payers can copy with it, some SME s can be badly affected