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How effective are VAT reforms in improving healthy dietary choices by EU consumers?

Author

Listed:
  • Farkas, Beatrice
  • Pérez-Domínguez, Ignacio
  • Pieralli, Simone
  • Elleby,Christian

Abstract

[EN] Governments are increasingly considering fiscal instruments to improve dietary health. This paper quantifies the medium-term impacts on European food markets of a differentiated VAT policy that promotes healthy food consumption while discouraging intake of less nutritious products. Scenarios involve reduced VAT on grains, pulses, and poultry, and increased rates on beef, pork, sugar, and high-fat dairy. Our results show a significant decline in domestic consumption of targeted foods. However, part of this reduction is exported to other markets – a phenomenon described as “health leakage,” raising questions about the broader effectiveness of such fiscal interventions. [ES] Los gobiernos consideran cada vez más el uso de instrumentos fiscales para mejorar la salud alimentaria. Este artículo cuantifica los impactos a medio plazo en los mercados alimentarios europeos de una política diferenciada del IVA que promueve el consumo de alimentos saludables y desincentiva la ingesta de productos menos nutritivos. Los escenarios analizados incluyen una reducción del IVA sobre cereales, legumbres y carne de ave, y un aumento sobre carne de vacuno, cerdo, azúcar y productos lácteos con alto contenido graso. Los resultados muestran una disminución significativa del consumo interno, aunque parte de esta reducción se exporta a otros mercados, un fenómeno que denominamos “health leakage”, lo que plantea dudas sobre la efectividad global de este tipo de políticas fiscales.

Suggested Citation

  • Farkas, Beatrice & Pérez-Domínguez, Ignacio & Pieralli, Simone & Elleby,Christian, 2025. "How effective are VAT reforms in improving healthy dietary choices by EU consumers?," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 25(01), June.
  • Handle: RePEc:ags:earnsa:358848
    DOI: 10.22004/ag.econ.358848
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    Agricultural Finance;

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