what is the sugar tax and why was it implemented

Sugar was taxed initially via a Molasses Tax, instituted in 1733. Its purpose was both to raise revenue and also an attempt to curb the enormous wealth of colonial (including American) sugar producers. Slavery and rum manufacturing were also considered justifications for this tax (6).

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What else did the Sugar Act do besides tax things?

The Sugar Act was a law passed by the British Parliament in 1764 that established a tax of three pence per gallon on foreign molasses imported by British colonial subjects. The Sugar Act also established taxes on foreign coffee, sugar, pimiento and select wines, and limited the colonists' ability to export lumber and iron to the French West Indies.

What are three things taxed by the Sugar Act?

The Sugar Act was a law passed by the British Parliament in 1764 that established a tax of three pence per gallon on foreign molasses imported by British colonial subjects. The Sugar Act also established taxes on foreign coffee, sugar, pimiento and select wines, and limited the colonists' ability to export lumber ...

How big was the tax on the Sugar Act?

The Sugar Act, also known as the Plantation Act, or, tellingly, Revenue Act, of 1764 was partially modification on the soon to expire Sugar and Molasses Act of 1733. Under this act, Colonial merchants paid a tax of six pence per gallon on foreign molasses.

Did the Sugar Act raise taxes?

The main purpose of the Sugar Act was to generate revenue from the American Colonies to help offset the cost of a standing army Parliament believed was needed to defend the Western frontier of the colonies. The Sugar Act actually lowered the tax on molasses but added taxes to other goods.

What is the purpose of a sugar tax?

The purpose of a sugar tax is to increase the cost of sugar-sweetened beverages in order to promote a decreased consumption, improve nutrition, and reduce obesity and chronic disease.

Which countries have implemented a sugar tax?

TiersCountriesWhen introducedTax designSaudi Arabia2017Seychelles2019VolumetricSouth Africa2018Sugar contentSpain202150 more rows•Mar 17, 2022

When did UK implement sugar tax?

Concerns about the health burden of obesity have prompted governments across the world to introduce sugar taxes. In March 2016, the UK Government announced a national Soft Drinks Industry Levy which was enacted in April 2018.

Why was sugar tax introduced in South Africa?

The logic was that, over the long term, the sugar tax would reduce sugar consumption levels, thereby decreasing the prevalence of these diseases – which are currently also placing people at a higher risk of severe forms of Covid-19.

Has the sugar tax reduce obesity?

Taxation on sugary drinks is an effective intervention to reduce sugar consumption (8). Evidence shows that a tax on sugary drinks that rises prices by 20% can lead to a reduction in consumption of around 20%, thus preventing obesity and diabetes(9).

What are the disadvantages of sugar tax?

Arguments against sugar taxIt leads to job losses. ... It is unfair on low-income groups. ... We shouldn't make judgements about people's lifestyle. ... Tax is not the best policy to reduce sugar consumption.

Did the UK sugar tax reduce obesity?

The research At the same time, University of Oxford modelling of the impact of health-related food taxation policies, conducted in collaboration with Reading University, showed that a 20% tax on sugary drinks could reduce the prevalence of obesity in adults in the UK by 1.3%.

Where does the money from sugar tax go?

Use this money to establish a new Healthy Food Innovation Fund, enabling schools to address rising health inequalities and childhood obesity with projects to boost healthy eating in school.

Is the UK sugar tax effective?

Reformulation success: 'The UK sugar levy has arguably been very successful from a public health point of view' The UK's Soft Drinks Industry Levy is responsible for a reduction in intake of nearly 6,500 calories from soft drinks per annum per UK resident, according to a new study.

How does sugar tax affect South Africa?

The changes will see the health promotion levy for beverages with more than 4g of sugar content per 100ml increased from 2.21c/g to 2.31c/g from 1 April 2022. Consultations will also be initiated to consider lowering the 4g threshold and extending the levy to fruit juices, it said.

What is sugar tax in South Africa?

In 2018, the South African Minister of Finance introduced the Health Promotion Levy (HPL) on sugary drinks that have more than four grams of sugar per 100 ml. The rate is fixed at 2.1 cents per gram of the sugar content that exceeds four grams per 100ml, i.e., the first four grams per 100ml are levy free.

When did South Africa introduce sugar tax?

2018South Africa implemented a sugar tax in 2018 by charging the manufacturers of sugary drinks a levy on the sale of their products.

Has the sugar tax worked in the UK?

Reformulation success: 'The UK sugar levy has arguably been very successful from a public health point of view' The UK's Soft Drinks Industry Levy is responsible for a reduction in intake of nearly 6,500 calories from soft drinks per annum per UK resident, according to a new study.

Does America have a sugar tax?

No state currently has an excise tax on sugar-sweetened beverages. Instead, soda taxes are levied locally in Boulder, Colorado; the District of Columbia; Philadelphia, Pennsylvania; Seattle, Washington; and four California cities: Albany, Berkeley, Oakland, and San Francisco.

Does UK have a sugar tax?

The UK sugar tax Officially called the Soft Drinks Industry Levy (SDIL), the tax puts a charge of 24p on drinks containing 8g of sugar per 100ml and 18p a litre on those with 5-8g of sugar per 100ml, directly payable by manufacturers to HM Revenue and Customs (HMRC).

Does China have a sugar tax?

In May, 2020, China lifted the additional tariff on imported sugar, slashing the tax imposed on sugar from 95 percent to 50 percent.

What is sugar tax?

A sugar tax is a tax on sugary drinks, also called a Sugar Sweetened Beverage Tax (SSBT). Public health advocates say an SSBT in Australia and New Zealand could help reduce consumption of SSBs and thereby reduce obesity and other associated diseases.

Why are food taxes important?

The WHO has identified food taxes as a tool to improve population diets [iv]. Taxing unhealthy foods and drinks to reduce consumption for public health reasons is an example of a government fiscal measure and can be effective because price is a key determinant of food choice [v].

Why is taxing SSBs not good?

Taxing SSBs may not provide the health improvement hoped for in Australia and New Zealand because intake of SSBs is relatively low and declining2. The Australian modelling above is based on 2011 data and consumption of SSBs has declined since then.

How can sugar free drinks be cheaper?

In a BMJ article2 JT Winkler from London Metropolitan University, UK, suggests making sugar-free drinks cheaper by reducing the margins companies put on them. Sugar-free drinks cost much less to make but are sold at the same price making them more profitable. Removing this “health premium” would make sugar-free drinks cheaper and shift demand in a healthier direction.

Why did Denmark abolish the fat tax?

Denmark has dismantled their ‘fat tax’ due to a lack of health improvement and unintended adverse consequences such as increased food costs, high administrative burden and tax evasion.

How much would SSB be reduced?

Modelling by Australian researchers [vii] estimate a 20% rise in the price of soft drinks and flavoured mineral waters would result in an average reduction of 141 g/day to 124 g/day of SSB consumption in men and from 76 to 67 g/day for women, representing a 12.6% decrease. Average energy intake would go down by 16 kJ/day (men), and 9 kJ/day (women).

Which countries have SSBT?

The United Kingdom has recently joined France, Hungary, Chile and Mexico in introducing a SSBT. Both the Australia and New Zealand governments have ruled out a SSBT at this stage.

Which states have taxes on sugar sweetened beverages?

After a few years without much attention, taxes on sugar-sweetened beverages (SSBs) are back in the headlines, with at least four states—Connecticut, Hawaii, New York, and Washington —considering such statewide taxes.

Why should excise taxes be levied?

As a rule of thumb, excise taxes should only be levied to internalize an externality (harm associated with consumption) or create a user-fee system. Due to their narrow base and regressive nature, they are unsuitable sources of general fund revenue.

What is excise tax?

An excise tax is a tax imposed on a specific good or activity. Excise taxes are commonly levied on cigarettes, alcoholic beverages, soda, gasoline, insurance premiums, amusement activities, and betting, and make up a relatively small and volatile portion of state and local tax collections.

What is the concept bill for SSBs?

In Connecticut, the introduced legislation ( HB5184 ), a so-called “concept bill,” merely states that an excise tax on SSBs should be imposed without revealing more detail as to tax base, rate, or revenue allocation.

How much sugar is in a 12 oz soda?

There would be no tax on beverages containing less than 7.5 grams of sugar per 12 ounces, but a tax of 1 cent per ounce on beverages containing between 7.5 grams and 30 grams of sugar per 12 ounces, and a tax of 2 cents per ounce on beverages containing more than 30 grams of sugar per 12 ounces. The revenue would be allocated to education ...

What are the exempt beverages from tax?

Exempted from the tax in Hawaii, New York, and Washington are 100 percent fruit juice, unsweetened milk products, dietary aids, and infant formula. Most localities exempt a similar range of beverages as Hawaii would under the governor’s proposal, although Philadelphia and the District of Columbia include diet beverages in their tax base.

What is a narrow tax base?

A narrow tax base is non-neutral and inefficient.

Why are there taxes on sugar?

A growing number of countries around the world have implemented taxes on sugar-sweetened beverages in an effort to improve the diets and health of their citizens. Most recently, the Soft Drinks Industry Levy came into effect in the United Kingdom (UK) earlier this month.

What is sugar tax?

Dubbed the “sugar tax” by the media, it applies to the majority of prepackaged, nonalcoholic beverages that contain at least 5 grams of added sugar per 100 milliliters (less than a third of can of soda) sold in the UK. It follows a precedent set by similar taxes in other countries, including Mexico, France, Saudi Arabia, and others.

Why is soda taxed?

Soda taxes might shape consumer habits. Regular consumption of sugar-sweetened beverages has been linked to higher risk of type 2 diabetes , heart disease, metabolic syndrome, and several other conditions. Drinking sugary beverages on a regular basis can also cause people to consume more calories than they otherwise would.

Why are taxes on sugar sweetened beverages important?

Taxes on sugar-sweetened beverages might also push manufacturers to reformulate their products and adjust their marketing strategies to sell more sugar-free offerings.

Where are Popkin taxes imposed?

Popkin has evaluated the process and effects of implementing taxes on sugar-sweetened beverages in California, Mexico, Colombia, and other jurisdictions .

Can you tax sugar in soft drinks?

However, it’s possible that some people might replace soft drinks with fruit juice or other products that contain high levels of natural sugars that aren’t taxed. Furthermore, taxes on sugar-sweetened beverages don’t target other sources of sugar in people’s diets or lower the cost of nutrient-rich foods and drinks that many people struggle ...

Does soda tax reduce sugar?

Early studies suggest that soda taxes might help reduce the consumption of sugar-sweetened beverages. For example, Popkin and colleagues have found that purchases of sugar-sweetened beverages fell by 8.2 percent on average. Trusted Source. in the two years following the implementation of a tax in Mexico. Likewise, a new study reported in the ...

Why was sugar taxed?

Sugar was taxed initially via a Molasses Tax, instituted in 1733. Its purpose was both to raise revenue and also an attempt to curb the enormous wealth of colonial (including American) sugar producers. Slavery and rum manufacturing were also considered justifications for this tax ( 6 ). That sugar tax was repealed in 1766 but played a key role in the alienation of the American colonies and in their Declaration of Independence.

What is SSB tax?

In April 2018, the United Kingdom introduced a levy on sugar-sweetened beverages (SSBs), with 2 bands of taxation: beverages containing 5–8 g added sugar/100 mL are taxed at 18 p/L and those with ≥8 g at 24 p/L ( 1 ). Of course, familiar voices loudly oppose such taxation, supporting the principle of market freedom and dismissing public health arguments that taxation will reduce SSB consumption thereby reducing the incidence of obesity and related chronic diseases, and raise valuable revenue to amplify public health gains ( 2 ). Taxation changes behaviors, and has effectively reduced harms from tobacco and alcohol, although their continued excessive consumption among more deprived communities is worrying ( 3 ). Reassuringly, Redondo et al. ( 4) in this issue of the Journal find SSB taxation to be effective among people in poorer socioeconomic circumstances, without causing a damaging tax burden.

Does sugar increase weight?

Meta-analyses show that sugar consumption does promote weight gain. Te Morenga et al. ( 10) reported a positive effect of SSB consumption on overweight in childhood with OR 1.55, based on cohort studies comparing high and low consumers, as there were no clinical trials of increased sugar intake. There were 5 trials of reduced sugar intake in children, with no change in standardized BMI or BMI z score. For adults, the effect size from increased sugar intake in short-term clinical trials was a net weight gain of 0.75 kg, and decreasing sugar led to an average weight loss of 0.8 kg, but long-term cohort studies did not show consistent effects on adiposity from greater consumption of SSBs or sweets. Thus sugar contributes, at least in the short term, but cannot account for much of the obesity pandemic or the increased incidence of type 2 diabetes ( 10, 11 ). Moreover, the effect is not a unique metabolic effect of sugar, as isocaloric replacement of sugar with other macronutrients produces similar consequences ( 10 ).

Is SSB taxed?

SSBs are widely consumed, entirely discretionary products, and are therefore appropriate targets for taxation. For effective revenue raising, sales should be maintained or taxes increased. The initial estimate was that the United Kingdom's SSB tax would yield £500 million/y, but that projection has already been reduced drastically because the manufacturers rapidly reformulated their products, adding artificial sweeteners to avoid exceeding the tax thresholds ( 5 ).

Is sugar bad for you?

A vast body of modern research has concluded that although sugar is associated with several conditions, its role in their causation remains confounded, with the exception of dental caries. Of course, extreme high-sugar diets displace more nutritious foods and deplete essential micronutrients ( 7, 8 ). When the city of Glasgow expanded from a small regional town to become the second city of the British empire in the 19th century, there was inadequate infrastructure for food provision. The demands of the growing population were met with a stereotypical imported diet of white bread, jam, and sugary tea, which persisted through habit and regional poverty as ship-building declined, well into the 20th century. Its upshot was widespread stunting, and a dramatic rise in heart disease in urban Scotland, compared with England, which even now appears to relate in part to lower fruit and vegetable consumption ( 9 ).

Does taxation reduce SSB?

To conclude, it seems likely that although taxation will achieve a reduction in SSB consumption, the current SSB taxation regimes in Mexico and the United Kingdom are unlikely to produce the reduction required to have a major or sustained effect on obesity. However, it is critically important that governments have now agreed with public health advocates, that damage from excessive consumption of unhealthy foods and beverages represents unacceptable damage as an "externality" from the free market: government intervention is necessary in the same way as to protect the public against environmental and water pollution. To be more effective, taxation may need to be increased substantially for SSBs as suggested by Redondo et al. ( 4 ), widened to include other sugar-containing products, or even directed at other obesogenic product classes such as intensively marketed high-fat sweetened snacks ( 17 ). Serious efforts at health promotion might go on to restrict the sales of undesirable foods and beverages, e.g., from vending machines and vehicles hovering around schools. Other measures might address caffeine, which increases SSB consumption addictively ( 18 ). No single policy or program will sufficiently affect the complex problem of obesity. Lessons from other complicated public health problems, such as road safety, alcohol, and drug use, show that a sustained, comprehensive portfolio of complementary strategies, delivered at scale, will be required. A tax on SSBs is a good start, but not the place to stop.

What is sugar tax?

What Is Taxed: The sugar tax is a levy put on drink companies. Drinks with at least five grams of sugar per 100mL are taxed. A lower rate is taxed (£0.18 per liter) for beverages containing five grams of sugar per 100ml or more, and a higher rate of £0.24 is taxed for those with eight grams of sugar or more.

Why are sugar taxes important?

The purpose of a sugar tax is to increase the cost of sugar-sweetened beverages in order to promote a decreased consumption, improve nutrition, and reduce obesity and chronic disease.

What is taxed on non-carbonated drinks?

What Is Taxed: Soft drinks and non-carbonated drinks with more than 5 grams of sugar per 100 milliliters; includes energy drinks, drinks containing 10 percent fruit juice, as well as lemonade containing more than 6 percent lemon juice

What is taxed on sugary drinks?

What Is Taxed: On sugary drinks (exceptions include diet soda 100% juice, and diet iced teas) as well as candies, pure sugar and dilutables (such as syrups ), chocolate and cocoa preparations containing added sugar

How much sugar is taxed on fruit juice?

What Is Taxed: Carbonated, flavored and other non-alcoholic drinks with more than 5 grams of sugar per 100 milliliters or on fruit or vegetable juices with more than 12 grams of sugar per 100 milliliters

What is sugar sweetened beverage?

Sugar-sweetened beverages, sometimes referred to as ‘sugary drinks’ include any non-alcoholic beverage that contains added caloric sweeteners. Different and specific beverages subject to the tax will vary and is specific to the country, state, or city ruling.

What is the tax rate on soft drinks?

Tax Rate: As of November 2019, tax rate is increased from 5 percent to 7 percent on soft drinks, and the tax on syrups and concentrates used for sugary drinks increased from 6 to 10 percent; a new 5 percent tax on the rest of sugary drinks is put into place, or products with less than 7.5 grams of sugar per 100 mL)

What is sugar based tax?

Sugar‑Based Tax. Sugar‑based taxes have rates that vary depending on the amount of sugar that drinks contain. In the 2009‑10 session, for example, the Legislature considered two bills that would have levied a tax of one cent per teaspoon of sugar in each drink. Compared to a volume‑based tax, a sugar‑based tax would lead to higher taxes on drinks with more sugar and lower taxes on drinks with less sugar. As shown in Figure 3, for example, a sugar‑based tax would result in somewhat higher taxes on many sodas and fruit drinks, and somewhat lower taxes on many sweetened teas and sports drinks.

What would a statewide sugary drink tax do?

A statewide sugary drink tax likely would reduce sugary drink consumption, potentially leading to improvements in health.

How would taxing sugary drinks affect consumption?

Lower Consumption of Sugary Drinks. Due to the price increases described above, consumers would buy fewer sugary drinks. The magnitude of the drop in consumption would depend crucially on the tax rate. For example, a two cent per ounce tax likely would reduce consumption by 15 p ercent to 35 p ercent. This estimate is based primarily on studies of sugary drink taxes implemented in Mexico and Chile and of simulated sugary drink taxes in the U.S. In our view, the most useful study is Allcott, Lockwood, and Taubinsky (2018), which uses data on U.S. households’ grocery purchases from 2006 t hrough 2015 t o estimate the consumer response to hypothetical sugary drink taxes.

How does a sugary drink tax affect the price of a drink?

Higher Prices for Sugary Drinks. A statewide tax on sugary drinks would lead to higher prices for the taxed drinks. The higher the tax rate , the larger the resulting price increase. For example, a tax of two cents per ounce likely would increase the price of the taxed drinks by 15 p ercent to 25 p ercent on average. This estimate is based on research on nationwide sugary drink taxes implemented in Mexico and Chile and on statewide fuel and tobacco taxes implemented in the U.S.

Why do we need inflation indexing?

Inflation Indexing Helps Achieve Fiscal Goals . . . Due to inflation, sugary drink taxes that are fixed in dollar terms will raise declining amounts of real revenue over time . Instead of keeping excise tax rates fixed in dollar terms, policymakers could index them to inflation—automatically keeping their real value constant over time. For example, an inflation‑indexed tax on sugary drinks would raise an amount of real revenue per ounce that is constant over time, instead of one that diminishes over time. (In either case, total revenue would depend not only on revenue per ounce, but on the total number of ounces consumed.)

How much is sugar tax on a drink?

The first tax is based on drink volume: two cents per fluid ounce. This tax ranges from $0.24 on a 12‑ounce can of cola to $1.28 on a 64‑ounce bottle of cranberry juice cocktail. The second tax is based on sugar content: 3 cents per teaspoon of sugar. Compared to the first policy, the second one levies a larger tax on the sodas and the cranberry juice cocktail—which contain relatively large amounts of sugar—and a smaller tax on the lemon iced tea and the sports drink, which contain more moderate amounts of sugar.

What are the two goals of sugary drinks?

Sugary Drink Taxes Have Two Purposes. Sugary drink tax proponents tend to emphasize two goals: a fiscal goal of raising revenue and a policy goal of improving health.

Is The Sugar Tax working?

• The government’s primary focus with its new charge was to lower the sugar content of popular sweetened drinks, incentivising a long-term shift towards healthier consumer habits. In this respect, the new duty has already had the designed effect. In 2016 the announcement of the imp…

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Expanding The Sugar Tax to Other Drinks

Sugar Taxes Around The World

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