Higher taxes on alcohol, tobacco can reduce healthcare burden on poor: study
Low socio-economic status is consistently associated with higher rates of non communicable diseases such as cancer, heart disease and kidney diseases in low and middle-income countries, a study shows
New Delhi: Higher taxes on soft drinks, alcohol and tobacco could significantly reduce the healthcare burden on the poor, a study published in The Lancet said.
Using data from India, China and Brazil, among others, the study shows that low socio-economic status is consistently associated with higher rates of non communicable diseases (NCDs) in low and middle income countries. Further, NCDs such as cancer, heart disease, kidney diseases, hypertension and obesity place a substantially higher economic burden on low income households, the study said.
The Lancet Taskforce on NCDs and Economics, a partner of World Health Organization’s (WHO) Independent High Level Commission on NCDs, came out with the study that indicates poverty is driven by NCDs. Data from household expenditure surveys was used to estimate patterns of expenditure on potentially unhealthy products by socioeconomic status, with a primary focus on low-income and middle-income countries.
The study showed that the increased taxes on unhealthy products would be borne by higher income households, and that lower-income households are quicker to respond to price change.
“Price policies and taxation are effective means to reduce NCD risk factors, such as tobacco and unhealthy diet, and can reduce inequalities. Price policies affect the consumption and expenditure of a larger number of high-income households than low-income households, and any resulting price increases tend to be financed disproportionately by high-income households,” the study said.
The study highlighted that non-communicable diseases such as cancer, heart disease and diabetes are responsible for 38 million deaths each year in the world, and 16 million of them are aged under 70.
“Non-communicable diseases are a ticking bomb with potential to affect our health and our economy adversely. In India, NCDs cause over 6 million deaths annually, and is a major cause of catastrophic healthcare expenditure. It is becoming hard to deny evidence that links unhealthy dietary habits as a major risk factor contributing to this additional health burden,” said Vivekananda Jha, executive director of the George Institute for Global Health. “Policy-level changes, such as progressive taxation policies hold promise in addressing this menace, in addition to increasing efforts to spread awareness,” he said.
As a share of all household consumption, however, price increases are often a larger financial burden for low-income households than for high-income households, the study said most consistently in the case of tobacco, depending on how much consumption decreases in response to increased prices. Large health benefits often accrue to individual low-income consumers because of their strong response to price changes.
“The best way to prevent people from tobacco is higher taxation on tobacco products. According to the latest Global Tobacco Atlas, the WHO’s benchmark is raising taxes to minimum 70% of the retail price but in India its only 26.46%. We need to raise the taxes to three times of the current percentage,” said Ravi Mehrotra, director at the Indian Council of Medical Research (ICMR)-National Institute of Cancer Prevention and Research.
Editor's Picks »
- Same-store sales growth trips at Future Retail
- Cipla Q4 FY18 results no reason to reverse stock underperformance
- Dr Reddy’s Q4: It’s a wait and watch, share price spike notwithstanding
- What SBI Q4 results say about the Indian economy and the bank
- Patanjali’s slowing growth does not mean that Colgate’s is accelerating