Indian state imposes 'fat tax' on junk food

The newly-elected government in the southern Indian state of Kerala has introduced a 'fat tax' on food items like burgers, pizzas and doughnuts. The 14.5% tax will be applied to fast food chains such as McDonald's, KFC, Pizza Hut and Domino's.

Kerala has the second-highest rate of child obesity among Indian states. While the aim of the new tax would be to curb this growing obesity, especially among kids, the state government is also expected to earn over Rs 100 million ($1.4 million). The list of food items also includes tacos, sandwiches and pastas, but it isn't clear whether it includes local dishes.

It isn't the first Indian state to focus on taxing junk food. Earlier this year, the eastern state of Bihar imposed a 13.5% value-added tax on sweets, salted peanuts and snacks such as samosas to earn revenues.

A similar 'fat tax' was Denmark in 2011, but was axed within a year. The tax targeted products containing more than 2.3% of saturated fat, including cheese, milk, butter, pizza, meat and oil. However, it was abolished in 2012, with the government admitting that it had failed to changes its citizens' eating habits. Instead, Danes had started shopping from neighbouring countries.

Earlier this year, UK introduced a sugar tax on soft drinks. A few months ago, the Indian government announced that it would start a similar tax on junk food, soft drink and other sweetened beverages, to prevent diabetes and obesity.

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