ANALYSIS OF FISCAL POLICIES ON SOFT DRINKS/SUGAR SWEETENED BEVERAGES, AND THEIR PRODUCTION, CONSUMPTION, AND PRICE DURING THE LAST DECADES IN IRAN

Background and Aim: Fiscal policies on soft drinks are increasingly being considered as potential policy instruments to prevent and control of Non-Communicable Disease (NCDs). This study aimed at analyzing the fiscal policies on soft drinks and their production, consumption, and price during the last decades in the Islamic Republic of Iran.Methods: This qualitative study was conducted in 2017. Data were collected in three phases: phase 1: a meta-review on the current fiscal policies on soft drinks in Iran, phase 2: a qualitative study using a semi-structured interview with key informants in the relevant organization covering all fiscal policies related to food and nutrition in Iran and exploring their strengths and weakness 3: reviewing the secondary data on the production, consumption, and price of these products during the last decade. The review of the regulations showed that for the first time, the third development plan (2000 to 2003) imposed 15% tax on carbonated beverages. Key informants stated that this low was not implemented due to operational problems. Based on the Article 37 of the fifth Five-Year Plan of the Islamic Republic of Iran Development (2011-2012), the list of health-related harmful goods and drugs, which may be misused should be determined and presented by the Ministry of Health and Education (MOHME). A working group under the responsibility of the MOHME announces the percentage of charges for these commodities at the beginning of each year. In addition, the advertising of services and products, which identified harmful to health, is prohibited by all media. The Budget Law 2013 states: The government is obliged to receive the tax revenue for 15% increase in the price of domestic produced carbonated sugar sweetened soft drinks and 20% increase in the price of imported carbonated soft drinks. Interviewees believed that most important challenges was determination of the harmful goods in the MOHME and definition of soft drinks, carbonated soft drinks, or sweetened beverages at the text of the low for sensitizing tax systems in order to determine the taxes to reduce their consumption in the country.Document reviews showed that Iranians consumed 32 to 42 liters of carbonated soft drinks per capita by 2016. Statistics from the Islamic Republic of Iran Customs Administration, report only one percent of domestically produced soft drinks export to the other countries and 99 percent of them are consumed in the country. Statistics from central bank of Islamic Republic of Iran and statistic center of Iran report the average household purchase cost of soft drinks increased in rural and urban households during 2001 to 2013. The comparison of the expenditure on soft drinks in different income deciles in urban and rural households also suggests a lower expenditure in the lower deciles of rural households compared to urban households. This amount was higher in above 8th deciles income rural households than similar urban ones. Survey on the goods price index showed incremental trend in the price index of carbonated soft drinks after 2011. The average price of 1 liter of soft drink was 0.4-0.47$ in Tehran market in 2017. Conclusion: Based on the recommendations of international organizations and the findings obtained in this study, the following strategies should be taken to increase the effectiveness of the taxation policy on carbonated soft drinks: the tax on sugar-based beverages produced in the country should be increased by more than 15% and its revenue can dedicate to school milk and increase the consumption of milk in children and adolescents. Monitoring and evaluation for achieving the expected goals of the policy along with continuing education should be done. It is suggested to review the list of goods and services harmful to health, annually in a scientific way, and for the most harmful, they should be taxed in coordination with the relevant organizations. Sugar should be excluded from the list of basic commodities or priority goods subject to government pricing and priced according to the mechanism of supply and demand of the market. Anti-contradictory laws are also suggested to remove from the prevention of NCDs, such as tax breaks for sugar.

Keywords:

Fiscal policies , Soft drinks/sugar sweetened beverages , Production , Consumption , Price