Russians plan junk food tax to fill a hole in the budget

FACED by a massive budget shortfall after the collapse of world oil prices, the Russian finance ministry has been scrabbling to find ways to raise extra revenue.

Now the Kremlin’s tax men have hit on one radical answer: taxing junk food.

The Russian government is apparently backing plans to impose an additional sales tax on a swath of junk foods, including soft drinks and crisps.

The proposals are designed to raise revenue and suppress demand for problem foodstuffs. Reports say president Vladimir Putin has already given his backing to the idea.

The new levy could take the form of general excise taxes on sugar and palm oil, the highly saturated vegetable fat commonly used in commercial food preparation, or retail taxes on soft drinks, crisps and other products that exceed World Health Organisation guidelines on sugar and fat content.

It is thought the taxes would contribute to already galloping inflation on food prices. A finance ministry official said: “We’re looking at the possibility of an additional tax burden on drinks with high concentrations of sugar and chemical additives.

“That’s one of the measures recommended by the World Health Organisation for combating excessive sugar consumption and associated diseases.”

The Russian proposals are strikingly similar to a plan put forward by Jamie Oliver, the celebrity chef turned healthy food campaigner, for a tax on sugary drinks in Britain.

So far the only product definitely marked for higher taxes in Russia is palm oil, with officials saying a $200 per tonne excise tax, equivalent to a third of the average price of $600 per tonne, could be introduced by July.