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New Caledonia passes first sugar tax bill — unlike Am Samoa's sugar bill, it's “flexible”

hidden sugars and added sugars
Bill looks at sugar content in all products, including candy

Pago Pago, AMERICAN SAMOA — In recent decades, Samoans have suffered some of the highest rates of obesity, diabetes and heart disease in the world. The situation has had a significant impact on American Samoa’s public health and cost of medical care. As recent as October this year, during National Diabetes Awareness Month, American Samoa was said to currently rank 12th in the world for the highest prevalence of diabetes cases per capita.

According to a 2018 article published on the Yale School of Medicine website, in the early 2000s, the adult overweight and obesity rate in the territory was nearly universal, at 93 percent, while the rate for children was close to 45 percent. Nearly 1 in 3 adults in American Samoa has diabetes. 

American Samoa in response to its diabetes and what is called lifestyle diseases has turned to both health and tax solutions to promote prevention.

For health efforts, the government is calling for a collaborative approach by the government and community, prioritizing preventive measures.

For tax efforts, the Fono has passed excise tax bills that target sugary drinks, causing local companies that import such drinks to cry foul.

Its most recent tax bill, passed in Sept. 2022, the tax increases on all soft drinks, or nonalcoholic carbonated beverages went from 15 cents to 30 cents, where 20 cents will go into the general fund and 10 cents will go to the LBJ Medical Center. According to the FY 2023 budget document, $3 million was estimated to be collected in FY 2023 for the Soda Tax, similar to estimates in pass years.

In a recent report Radio New Zealand states that New Caledonia in its bid to respond to the country’s diabetes crisis — statistics reveal that about two thirds of New Caledonia's 270,000-strong population is overweight and that eleven percent suffer from diabetes — is looking at targeted taxation also to combat the problem, but with a more ‘flexible’ approach.

New Caledonia’s Congress recently endorsed, for the first time, a new "flexible" tax on sugar products, not just drinks.

Instead, the tax bill targets both imported and locally-made products containing a significant sugar component, with varying rates according to the percentage of sugar contained in the product.

The most targeted products in the list are sugary soft drinks, ice-creams, confectionery, chocolate, but also sauces, cereals, biscuits (cookies), bakery and pastry items — all with different taxation rates.

According to the Radio New Zealand report, “it applies at the following rates: 20 French Pacific Francs (CFP, 0.18 US dollars) per kilogram or litre for items containing 5 to 9.99 percent of sugar, 40 French Pacific Francs (CFP, 0.36 US dollars) per kilogram or litre for items containing 10 to 29.99 percent of sugar, 60 French Pacific Francs (CFP, 0.55 US dollars) per kilogram or litre for items containing 30 to 39.99 percent of sugar and 85 French Pacific Francs (CFP, 0.77 US dollars) per kilogram or litre for items containing over 40 percent of sugar.

“The tax, in its initial stages, targets a first list of sugary food products.”

During the Congress session on November 21, 2023, in Nouméa, the bill was approved by 32 members with another 20 opposing the text, RNZ reports.

The mover of the Bill, pro-independence politician Gilbert Tyuienon, is also the minister in charge of taxation within New Caledonia's bipartisan government.

Defending the bill, he said the idea of taxation on sugary products had been discussed since 2015 and that, since, there had been much consultation with stakeholders in order to fine-tune the implementation.

The revenue expected to be generated by the new tax is estimated by the government at some three billion French Pacific Francs (US$27.5 million).

These new financial resources would be re-directed towards financing projects focusing on prevention and public awareness of the dangers related to high consumption of sugary products.