Sugar-sweetened beverages, cause harm to society through related public budgets and the public health costs of treating obesity, diabetes and cardiovascular disease. Tax on sugary drinks would enable policy makers to improve health outcomes by reducing unhealthy consumption, and may help generate additional tax revenue for more spending on human capital through soft earmarking.
Policymakers need to consider which tax type and tax structure work best for the policy purpose. Excise taxes are the most commonly used form to tax sugar-sweetened beverages. Specific taxes can reduce price gaps between different brands, decreasing the probability that consumers will switch to cheaper brands when taxes increase. However, excise taxes need to be increased regularly to keep up with inflation and income growth. From a public-health perspective taxing sugar content (rather than per-ounce tax) is most effective. When focusing on sugar content, however, the tax administration’s capacity to implement and the resources of the country to assess sugar content in these beverages are factors. Countries considering sugar-sweetened beverage taxes should also complement the tax policy with necessary legislation on consumer protection and product labeling.
WHO SEARO extends technical support to countries to develop and implement taxes on sugar sweetened beverages
Technical report on : Taxation for Sugar Sweetened Beverages in Sri Lanka