A reform of value-added taxes on foods can have health, environmental and economic benefits in Europe

Marco Springmann*, Eugenia Dinivitzer, Florian Freund, Jørgen Dejgård Jensen, Clara G. Bouyssou

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

Fiscal policies can provide important incentives for encouraging the dietary changes needed to achieve global policy targets. Across Europe, the foods relevant to health and the environment often incur reduced but non-zero value-added tax (VAT) rates at about half the maximum rates, which allows for providing both incentives and disincentives. Integrating economic, health and environmental modelling, we show that reforming VAT rates on foods, including increasing rates on meat and dairy, and reducing VAT rates on fruits and vegetables can improve diets and result in health, environmental and economic benefits in most European countries. The health improvements were primarily driven by reductions in VAT rates on fruits and vegetables, whereas most of the environmental and revenue benefits were driven by increased rates on meat and dairy. Our findings suggest that differentiating VAT rates based on health and environmental considerations can support changes towards healthier and more sustainable diets in Europe.
Original languageEnglish
JournalNature Food
Number of pages11
ISSN2662-1355
DOIs
Publication statusE-pub ahead of print - 9 Jan 2025

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