The goal was to simplify, but obviously the opposite was achieved. In India is causing discussion “popcorn tax” case, after the government targeted the hugely popular snack in a country where every year, in cinemas alone, almost 900 tons consumed. The tax reform has given rise to a convoluted system that for the same product – popcorn – provides three distinct levels of taxation: whether it is packaged or loose, whether it is branded or “generic”, whether it is sweet or salty. A puzzle that not even the Minister of Finance can solve Nirmala Sitharaman, in an attempt to explain it, solved it. In fact, his words at the press conference were not very helpful: "As long as the popcorn is salty, even spicy, the tax is 5%. But when caramel is added, it is no longer salty." And then in that case the tax rises to 18%, almost like a luxury good or an imported product.
India, it's popcorn chaos
This alone would be enough to generate indignation, but the The regulatory labyrinth doesn't end here: salty popcorn is taxed at only 5% if sold loose, but if it is in any plastic container, the rate goes up to 12%. So it is likely that in the very popular cinemas of the land of Bollywood the tax will go up to 12% or 18%, with a presumable increase in the cost of the entrance ticket, in a country where the average annual per capita income is $2.500, even though a high number of billionaires reside there.
I detractors of the reform, wanted to standardize the tax system at a national level, recalled the battles of Mahatma Gandhi, famous among other things for the march against the British colonial monopoly on the sale of salt, which at the time was heavily taxed, and therefore opposed to the tax on popcorn. The same mess, by the way, the government made with other consumer goods, Such as'coconut oil which is taxed at 5% as a food product and at double figures as a hair beauty product.
However, there are also those who defend the attempt at reform of the government, arguing that the differentiated rates are an effort to maintain the progressive indirect tax, taxing differently products that are bought mainly by the poorest consumers – such as loose popcorn – from those that can be bought by richer citizens, such as obviously branded packages.
