There Is Proof That “Sin Taxes” In UK Are Giving Results

Products that are harmful for health of people and the environment are being slapped with new taxes by the United Kingdom as its government strives to alter the consumption behavior of consumers.

Plastic bags, diesel cars and sugary soft drinks have been quickly spalled with new taxes by the government in succession and it hopes that such taxes would make the products less attractive for consumers.

There has however been some criticism of the new taxes. the United Kingdom was ranked as the second worst country with the European Union after Finland for “nanny state oppression,” by the Institute of Economic Affairs, a free market think tank.

Despite the criticism, there are indications that the exact results that the government was hoping for are being delivered by the taxes.

Since 2015, customers are being charged 5 pence (7 cents) for plastic shopping bags at the large UK retailers. While reducing the amount of waste, litter and environmental degradation was among the aims of the government apart from reduction in the number of bags used. And according to government research, there was a reduction of bags given out by top U.K. retailers by 83 per cent or by 6 billion in the year ending April 2017, primarily because of the news taxes imposed. This essentially means every individual used 25 bags instead of the earlier 140.

A new tax on sugary soft drinks is to be implemented by the United Kingdom very soon. The new tax would be applicable for ala drinks that have a sugar content of more than 5 grams per 100 milliliters and the taxes would be more for drinks with even higher sugar content or over 8 grams. There is already evidence that the announcement of the tax, made way back in 2016, is already showing desired impact of the government desire to reduce consumption of sugar and thereby childhood obesity. Sugar content in the drinks have been already reduced to the permissible limits by 50 per cent manufacturers, the U.K. government said on Thursday.

A similar higher tax on diesel powered vehicle was put into effect on April 1. Removing dirty cars off the road and enhancement of the air quality were the aims of the government through the measure. Purchases of diesel cars are being discouraged by the new levy. Many buyers have already been scared away from diesel cars by the Volkswagen diesel emissions scandal and the news plans of banning of sale of new cars running on gasoline and diesel from 2040. According to the Society of Motor Manufacturers and Traders, in March this year, there was a drop in sale of diesel cars in the U.K. of 37 per cent compared to the same month a year earlier. There was a decline of about 25 percent in the number in January and February.

(Adapted from Money.CNN.com)

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Categories: Economy & Finance, Regulations & Legal, Strategy, Sustainability, Uncategorized

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