A reform of value-added taxes on foods can have health, environmental and economic benefits in Europe
Authors: Marco Springmann, Eugenia Dinivitzer, Florian Freund, Jørgen Dejgård Jensen, Clara G. Bouyssou
Published: 09 January 2025 / Nature Food (Nat Food) ISSN 2662-1355 (online)
Abstract
Fiscal policies can provide important incentives for encouraging the dietary changes needed to achieve global policy targets. Across Europe, the foods relevant to health and the environment often incur reduced but non-zero value-added tax (VAT) rates at about half the maximum rates, which allows for providing both incentives and disincentives. Integrating economic, health and environmental modelling, we show that reforming VAT rates on foods, including increasing rates on meat and dairy, and reducing VAT rates on fruits and vegetables can improve diets and result in health, environmental and economic benefits in most European countries. The health improvements were primarily driven by reductions in VAT rates on fruits and vegetables, whereas most of the environmental and revenue benefits were driven by increased rates on meat and dairy. Our findings suggest that differentiating VAT rates based on health and environmental considerations can support changes towards healthier and more sustainable diets in Europe.
Read the full article here: https://doi.org/10.1038/s43016-024-01097-5
Acknowledgements
M.S. acknowledges funding from the Wellcome Trust through a Career Development Award (award number 225318/Z/22/Z) and the EU Horizon Programme through the projects BrightSpace (grant agreement number 101060075) and CATALYSE (grant agreement number 101057131). E.D. acknowledges funding from the Wellcome Trust through the Livestock, Environment and People (LEAP) project (award number 205212/Z/16/Z).
Source: Environmental Change Institute, University of Oxford, Oxford, UK