New Study Finds VAT Reform on Foods Can Deliver Health, Environmental, and Economic Benefits

A new study published in Nature Food titled "A reform of value-added taxes on foods can have health, environmental and economic benefits in Europe" reveals significant advantages of adjusting VAT rates based on health and environmental criteria. The research, led by Professor Marco Springmann, Professorial Research Fellow in Climate Change, Food Systems and Health at UCL's Institute for Global Health, suggests that such reforms can promote healthier and more sustainable diets while making them more affordable.

The study advocates for levying full VAT rates on meat and dairy products and zero-rating fruits and vegetables. This approach, according to the researchers, could enhance dietary health, reduce environmental impacts, and boost government revenues. The findings indicate that zero-rating fruits and vegetables could increase their intake by about one portion per week on average, while applying full VAT rates to meat and dairy could reduce their consumption by a portion per week. In the UK, where most basic foodstuffs are currently zero-rated, the reduction in meat and dairy intake could be as much as two portions each per week.

Professor Marco Springmann emphasized the urgency of reform, stating, "When it comes to food, tax systems across the EU and the UK are currently not fit for purpose. A modern tax system that addresses the critical health and environmental challenges of the food system is urgently needed. Adjusting VAT rates based on their health and environmental impacts is as good as a no-loss policy gets whilst delivering benefits for public health, the environment, and even government revenues.”

This research was conducted by the Environmental Change Institute and the Oxford Martin School.

Links

• A reform of value-added taxes on foods can have health, environmental and economic benefits in Europe publication
• Professor Marco Springmann UCL Profiles