Sugary drink tax

A sugary drink tax, soda tax, or sweetened beverage tax (SBT) is a tax or surcharge (food-related fiscal policy) designed to reduce consumption of sweetened beverages. Drinks covered under a soda tax often include carbonated soft drinks, sports drinks and energy drinks. This policy intervention is an effort to decrease obesity and the health impacts related to being overweight, however the medical evidence supporting the benefits of a sugar tax on health is of very low certainty. The tax is a matter of public debate in many countries and beverage producers like Coca-Cola often oppose it. Advocates such as national medical associations and the World Health Organization promote the tax as an example of Pigovian taxation, aimed to discourage unhealthy diets and offset the growing economic costs of obesity. Tax design approaches include direct taxes on the product and indirect taxes. Indirect taxes include import/export taxes on sugar or other ingredients before it has been processed and local/regional.international taxes. Sales tax (indirect tax) is paid by the person consuming the item at the time of purchase and collected by the government from the seller. VAT (value added tax) is the most common type of tax and is also added on at the time of purchase, at an amount that is dependent on the value paid for the item. The amount of both VAT and sales tax are directly proportional to the amount of money paid for an item and do not consider the volume of food or drink. For this reason, a large (bulk) item would have less tax compared to a smaller cheaper item (i.e., there is less tax impact on larger packages of a food item). Most taxes on sugar-sweetened beverages (SSBs) are set volumetrically (i.e., with a constant rate per unit volume), and that "only three SSB taxes worldwide are proportional to sugar content." The study argued that such volumetric taxes "are poorly targeted to the actual health harms from SSBs," and suggested taxing the amount of sugar in beverages, rather than the volume of liquid accompanying the sugar.