Diet drink dilemma

Member of Parliament for St Catherine South East Dr Alfred Dawes is raising concern that the special consumption tax on non-alcoholic sweetened beverages will also affect diet drinks, which are a healthier substitute for consumers.

“You are taxing persons who are trying to make healthier choices,” said Dawes, who is also the opposition spokesman on health.

“Why did we go for the type of tax that has had the worst effects on consumer behaviour?” Dawes questioned during yesterday’s sitting of Parliament’s Standing Finance Committee reviewing the 2026-2027 Estimates of Expenditure and other budget documents.

He suggested that a better approach would have been to go for a graduated tax “where you force manufacturers to reformulate and you may not affect sales overall, but you may affect the sugar content that is being consumed”.

Finance and the Public Service Minister Fayval Williams said the Government was not averse to reviewing a tiered approach to introducing the tax.

Damion Crawford, member of parliament for St Catherine North West, also highlighted concerns about the tax, indicating that it would have a disproportionate effect on poor Jamaicans.

Williams said the Government used an estimate of about 40 million cases of sugary drinks, which converts to approximately 500 billion millilitres, to compute the tax take.

With estimated earnings of $10.1 billion, at two cents per millilitre from the tax, Crawford wanted to know whether the Government anticipated a reduction in the consumption of sugary drinks as it would equate to 500 billion millilitres.

GOOD OUTCOME

However, Williams said consumers could decide to drink fewer of the sugary drinks, which would result in a reduction in revenues. She said this would be a good outcome from a health perspective.

At the same time, she argued that people might decide to drink more sugary drinks, which would result in increased revenues.

“If we get more than is estimated, that extra goes in the health sector to take care of those people who land there – they are going to show up complaining of all kinds of ailments as a result of drinking excess sugary drinks,” she said.

However, Crawford questioned whether the finance ministry had carried out a distributional impact assessment to see which sectors of the society would be most affected by the tax.

Highlighting the prices of a range of sugary drinks, from bag juice to sparkling wine, Crawford argued that the “choice of a quantity-per-millilitre tax disproportionately impacts cheaper beverages”.

Noting that she had heard the concern that the sugary drink tax would affect poor people the most, the finance minister said the Government wants everyone to reduce their sugar intake.

She said people drinking more of the sugary drinks are the ones ending up at hospitals.

“We want the behaviour of persons to change,” she insisted.

However, Crawford contended that the projections for tax intake did not suggest that the administration would be successful in changing behaviour.

The tax on non-alcoholic sweetened beverages is to be implemented in the first quarter of the new fiscal year.

edmond.campbell@gleanerjm.com