Study Recommends Reforming VAT Rates to Increase Affordability of Sustainable Foods

A study led by researchers from the Environmental Change Institute and the Oxford Martin School recommends reforming VAT rates on food based on health and environmental considerations. The study suggests applying full VAT rates to meat and dairy products, while zero-rating fruits and vegetables to help consumers choose healthier and more sustainable diets. This change is expected to increase fruit and vegetable intake by one portion per week on average, while reducing meat consumption by the same amount, leading to health benefits and a significant decrease in greenhouse gas emissions.

The researchers estimate that these reforms could prevent 170,000 cases of diet-related diseases per year in the UK and EU and cut greenhouse gas emissions by 50 million tonnes. Despite an increase in fruit and vegetable production, demand for agricultural land would decrease, and tax revenues would rise, potentially increasing the UK's GDP by 0.6%. The lead author of the study, Professor Marco Springmann, emphasizes the urgent need for a modern tax system that addresses the critical health and environmental challenges of the food system, highlighting the benefits for public health, the environment, and government revenues.