Public Health Taxes: Should Sugar-Sweetened Beverages Be Taxed? If So, How?

Abstract

Due to increasing health concerns associated with sugar consumption, the World Health Organization (WHO) has recommended the implementation of taxes targeting sugar-sweetened beverages (SSBs). This article endeavours to reconnect the actual research with the potential legal framework for SSB taxation through a comparative approach. Its objective is to provide policymakers with insights into whether to introduce such taxation, the various approaches available and the resulting effects. The authors contend that SSB taxes serve as regulatory measures intended to reduce sugar consumption and address externalities. In comparison with other regulatory non-fiscal tools (total ban/minimum price policy) or fiscal policies (rising VAT rates), excise duties better fit the extra-fiscal goals associated with public health. Consequently, they propose that SSB taxes should be designed as follows: (i) covering all kinds of sugar/sweeteners, avoiding the recourse to a closed list; (ii) levying specific excise taxes in proportion to the sugar content; (iii) ensuring obligatory pass-through of these taxes to consumers; and (iv) earmarking a portion of the revenue to support health programmes and preventive campaigns.