The coming budget arrangements act includes the taxation of soft drinks, to be imposed gradually according to the harm caused by each product, TheMarker reported this week (). The taxation will not apply to natural beverages such as water, seltzer, and milk, nor alcoholic beverages, coffee, and tea. The tax will be imposed on bottled juice and diet drinks.
The new tax is expected to be between NIS 1.61 (49¢) and 2.89 (88¢) per liter (quart), depending on the size of the bottle and the amount of sugar in the product.
The choice to focus on taxing soft drinks taxation is related to their unique negative effect on obesity. according to studies presented to the food committee of the health ministry in 2016, consuming one sugary drink a day increases the risk of obesity by 60%. In addition, a 2016 comparative study that was presented found that children in Israel take in even more sugary drinks than American children.
According to the global average, as of 2016, 25% of girls and 32% of boys drink sugary drinks daily. The average in the United States is 30% among girls and 37% among boys – while in Israel the average is 41% for girls and 45% for boys.
The explanatory notes accompanying the new tax proposal cite studies examining the effectiveness of taxing sugary foods on citizens’ consumption habits that suggest such taxes are able “to significantly reduce the consumption of sugary drinks, thus leading in the long run to a significant improvement in the health of the residents.”
The cost of obesity in Israel is estimated at NIS 6 billion ($1.8 billion) a year, according to data provided by the health ministry. One-third of the damage is caused by direct costs of treating diabetes, and two-thirds by indirect costs, such as loss of ability to work, sick days, and nursing care.
According to data provided by the Maccabi HMO to the health ministry, the HMO’s expenditure on a diabetic patient is 53% higher than the expenditure on the average insured member.