Designing Sweetened Beverage Taxes Built for Meaningful Public Health Impact: New Sweetened Beverage Tax Position Paper Outlines Key Elements 

To date, more than 100 countries have enacted sweetened beverage (SB) taxes and there is resounding evidence that they work. SBs or drinks with free sugars and non-sugar sweeteners (NSS) are an important target to tackle rising diet-related diseases. Drinking SBs is associated with increased rates of obesity, diabetes, cancers and other noncommunicable diseases (NCDs). Beyond their negative health and economic impact, SBs also hurt the environment through their reliance on natural resources like water and pollutants like plastic. SBs taxes shift consumers away from unhealthy products by making them less affordable than healthier options. They also raise meaningful revenue. This is all done without evidence of broad negative economic effects.  

The Global Health Advocacy Incubator (GHAI) developed this Sweetened Beverages Tax Position Paper as a guide on how to explicitly design SB taxes to improve population health.  The paper recommends ways to ensure that the tax will make all unhealthy drinks less affordable, reduce their consumption over time and result in a decrease in diet-related diseases. It urges governments to reinvest the revenue towards health promotion to further its health and equity impact. It argues that there is a missed opportunity if governments do not design strong SB taxes primed to reach their intended public health potential. It was developed in partnership with other public health organizations, including COLANSA (Latin American and Caribbean Nutrition and Health Community of Practice), the Center for Science in the Public Interest (CSPI), the Global Center for Legal Innovation on Food and Environments at the O’Neill Institute of Georgetown University and Vital Strategies.  

Globally, SB tax designs range widely, and these discrepancies have influenced consumer response to the tax. This paper draws on scientific evidence and lessons learned on SB taxes.  It also outlines the economic, public health and human rights justifications for SB taxes. And it provides a step-by-step guide for advocates and decision-makers to design a SB tax optimized for maximum public health impact through specific recommendations for: policy objectives, tax rates, tax scope, tax type, tax base and revenue use.  

How SB Taxes Can Deliver on Their Public Health Potential and Promise:  

Changing consumer behavior now and over time: If a tax rate is too low, it may not lead to a significant price difference between the unhealthy (taxed) and healthy (untaxed) products. So, consumers may not be motivated to purchase the healthier option. On the other hand, a high tax rate would make the healthier (untaxed) product cheaper and more attractive to the consumer. Also, specific taxes without regular inflation and income adjustments aren’t built to stand the test of time and will lose their effectiveness in the long term.  

Taxing all unhealthy drinks: Excluding unhealthy drinks, like sweetened milk products or those with NSS, limits the SB tax’s ability to improve population health. A tax based on sugar content alone may drive consumers to replace drinks high in sugar with equally harmful drinks, like those with NSS. The World Health Organization (WHO) does not recommend NSS for weight loss or reducing NCDs so those considerations should be reflected within the tax design.   

Avoiding unhealthy substitutions: If the tax leads companies to reformulate their products (replacing the sugar with NSS) consumers may think that these drinks are healthier when they are not. Most SBs, including products with NSS, are ultra-processed products (UPPs), which are associated with numerous diet-related diseases. NSS should not be seen as a strategy for harm reduction, even if the industry positions it that way.

Maximizing impact through earmarking: The revenue generated from the tax can support programs for vulnerable communities and strengthen health systems. Governments can explore using the monies to fund healthy food subsidies, school meals, potable water, nutrition, universal health care, NCD prevention, among others. This enhances the progressive impact of the tax by reinvesting the revenue in programs that benefit communities most affected by SB consumption.

As momentum for SB taxes continues to take hold, it’s critical to design them to reach their full public health potential. Read the SB Tax Position Paper for a blueprint on how governments can design strong SB taxes that drive the populations towards healthier outcomes.