Kerala government has introduced fat tax of 14.5 percent for chains like McDonald's that sell junk food.
Highlights
- 14.5% tax for chains like McDonald's that sell junk food
- Tax will bring in 10 crores a year: government
- Kerala "fat tax" revealed in new government budget
Kerala has a new incentive to count calories.
The Left government headed by Pinarayi Vijayan has introduced a "fat tax" of 14.5 per cent on restaurants that sell junk food like burgers, pizzas and doughnuts.
The new tariff will apply to chains like McDonald's and Domino's and it's up to them to decide whether to pass on the cost to customers by raising prices, said government officials.
Before it was voted out in May, the Congress-led government had introduced a policy that will to make Kerala alcohol-free within 10 years. Hundreds of bars have already been shut down, though five-star hotels are exempt for now.
The fat tax was announced by the government today as it presented its budget in the state legislature. The government expects to raise Rs 10 crore annually through the new cess.
In January, Chief Minister Nitish Kumar's government in Bihar introduced a "luxury tax" on samosas, partly to anticipate the plunge in the state's revenues from a new ban on alcohol sales.