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Governments use excise taxes to reduce consumption of unhealthy foods and drinks high in sugar, salt, or fat, aiming to improve public health by making these products more expensive and less accessible to consumers.
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Oman introduced excise taxes starting June 2019, targeting tobacco, energy drinks, and carbonated drinks, later expanding in 2020 to include sweetened beverages and unhealthy foods like chips, chocolate, and biscuits, with tax rates up to 100%.
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The main goal of excise taxes on junk food and sugary drinks is to reduce consumption by increasing retail prices, making these products less affordable and encouraging consumers to choose healthier alternatives such as water, fruits, and unsweetened beverages.
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Excise taxes also generate government revenue, which can be allocated to public health initiatives like education campaigns promoting healthy lifestyles or subsidizing healthier food options, further supporting improved dietary habits and reducing the burden of diet-related diseases.
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Evidence from other countries shows excise taxes lead to lower sales and consumption of taxed items, but the impact depends on tax rates, consumer price sensitivity, availability of untaxed substitutes, and how fully taxes are passed to consumers.
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While taxes primarily influence purchasing through price, they also raise awareness about healthy eating by highlighting public health reasons in discussions and funding health promotion programs, indirectly encouraging consumers to reconsider their dietary choices.
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Though long-term data from Oman is unavailable, international experience suggests excise taxes reduce unhealthy consumption, with some individuals reporting decreased intake of taxed products, making excise taxes part of a broader strategy to improve public health.
Source: Zawya
