Taxing sugary drinks can lead to better health outcomes in Kazakhstan - World Bank

Global evidence shows that excessive consumption of sugary drinks is linked to the development of a wide range of health issues, including diabetes, obesity, and cardiovascular disease. These diseases have a significant impact on society, leading to premature mortality, lost productivity, and avoidable healthcare costs.

Sugar Sweetened Beverages generally include sugary sodas, sports drinks, fruit drinks (less than 100% fruit), pre-sweetened teas and coffees, enhanced waters, and energy drinks. Such drinks contribute significantly to sugar and energy intakes around the world, without adding any nutritional value to diets.

Consumption of sugary drinks is increasingly growing in Kazakhstan, particularly of energy drinks. The new National Health Strategy 2020-2025 states that the current damage caused by non-communicable diseases to the economy of Kazakhstan costs 2.3 trillion KZT per year, equivalent to 4.5% of the country’s annual GDP in 2017.

During the last five years, more than 30 countries (including the United States, United Kingdom, France, Estonia and Chile) have implemented taxes on sugary drinks as an effective measure to reduce the burden of non-communicable diseases on state-provided healthcare, and to improve economic productivity. Experience shows that increases in prices and decreases in purchases of sugary drinks do not cause a negative impact on jobs or production in related sectors such as manufacturing or retail.

“Introducing a tax on sugary drinks is a win for public health, and a win for the economy. A simulation of the impact of this tax in Kazakhstan, under various designs, shows that it could generate up to KZT 182 billion (0.25% of GDP) by 2022, as well as reduce consumption in line with other countries”, Dr. Kate Mandeville, World Bank Senior Health Specialist said.

The designs of the taxes vary, but global evidence shows preferences for specific excise taxes based on the volume of sugar content in these drinks. Both alternatives were selected by the World Bank team to analyze the policy options for Kazakhstan. The success of these policies would depend on the implementation of the digital registration and control stamp system, as well as strong regulation of sugary drinks labelling.