State Govt. proposes to impose a ‘fat tax’.
By Sreekanth A. Nair
In a slew of measures to find resources for development activities, the Kerala government proposed a ‘fat tax’ of 14.5 per cent for burgers, pizzas, and pasta served in branded restaurants. The decision was included in the first financial budget of the LDF-led government which was presented on Friday.
The proposed tax is expected to generate an additional annual revenue of Rupees 10 crore to the government.
“The proposed ‘fat tax’ of 14.5% for burgers, pizzas, and pasta served in branded restaurants would target an additional revenue of Rs 10 crore,” state finance minister TM Thomas Isaac said while presenting the budget.
Fast-food chains such as McDonalds, Dominos, Pizza Hut, Subway, KFC, and Chicking are likely to take the hit as dining out at any of these restaurants will become costlier soon.
With the decision, Kerala has become the first Indian state to impose a tax on fast food items. The budget also includes a proposal to impose 5 percent tax on some packed foods.
The state, which is experiencing a financial crisis, may see worse effects if the Arabian countries go ahead with their second phase of ‘nitaqat’ (replacement of foreign workforce with domestic labor) as the income from the Gulf is one of the main sources of the state’s income.
The government has proposed many programs to speed up the momentum of the state’s economy. It includes an ‘anti-slowdown package’ of Rs 12,000 crore.