Panama’s new health plan increases tax on sugar-sweetened beverages

By Asia Sherman

- Last updated on GMT

© Getty Images / piotr_malczyk
© Getty Images / piotr_malczyk

Related tags Panama Sugar-sweetened beverages

Panama passed a new law this week that creates a national health improvement action plan and increases taxes on the consumption of sugar-sweetened beverages.

“In order to promote and stimulate healthy lifestyles, the Ministry of Health succeeded in having the National Assembly approve law 114 of November 18, 2019, which establishes the selective tax on consumption of sugary drinks,”​ the Ministry of Health said in a press release.

The new norm modifies Law 45 of 1995 law to increase the tax on soft drinks from 5% to 7%. It also sets a 5% tax on the rest of domestic or imported sugary drinks and increases the tax from 6% to 10% on syrups and concentrates used for the production of sugary drinks.

Dairy-, grain- and cereal-based beverages, natural fruit juices and concentrates, or products with less than 7.5 grams of sugar per 100 ml of sugary drink are exempt from the tax.

Revenue collected will be distributed in specific percentages to the various state institutions to implement the action plan’s programs, and a commission will be established to ensure the appropriate use of funds.

Composed of government ministry, consumer protection, industry and health association representatives, this monitoring body will meet at least once a month to discuss strategies to promote nutrition and physical activity, raise awareness about the impacts of sugar consumption, and advance corporate responsibility to encourage better eating habits.

The law also gives the sugar-sweetened beverage industry a period of 90 working days from when the law was passed to include nutritional content on all national and imported product labels in Spanish.

The obesity epidemic in Panama

The initiative responds to an obesity epidemic in the country that has been accompanied by a spike in non-communicable chronic diseases including diabetes, hypertension and cancer in both adult and adolescent populations.

In Panama, 62% of adults are overweight, and one in four are obese. In young children, overweight affects one in 10, and at least four in ten schoolchildren are overweight, according to data from the ministries of health and education and the UN Food and Agriculture Organization (FAO).

Although the law introduces first steps towards combating this public health crisis, food and nutrition experts say that profound changes in food systems are needed, from production to consumption, through a comprehensive set of policies to truly transform the nutrition environment.

“There are affordable solutions to fight hunger and curb this obesity epidemic, but greater political commitment, awareness of the importance of what we eat and actions among all sectors are required,”​ said Adoniram Sanches, FAO Subregional Coordinator for Mesoamerica, during the commemoration of World Food Day in Panama last month.