Tax debate on soft drinks continues – Lexology



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  • The effectiveness of the taxation of sweetened beverages to reduce the amount of sugar consumed has been the subject of debate for several years. As we have already reported on this blog, the World Health Organization (WHO) released a report in 2016 that concluded that taxing sweetened beverages (and food) reduced their consumption. However, an independent expert group advising the WHO has not recommended taxing sugary drinks in the 2018 report titled "The Moment of Making Decisions" (see our blog of June 5, 2018). ).
  • The American Academy of Pediatrics and the American Heart Association have recently approved the taxation of sweetened beverages as a way to reduce sugar consumption. These groups issued a policy statement with six recommendations aimed at reducing the consumption of sugary drinks in children and adolescents. The first recommendation is:
    • "Local, national and / or national policies to reduce the consumption of added sugars should include consideration of approaches to increase the price of sweetened beverages, such as excise tax." . These taxes should be accompanied by an education of all stakeholders on the reasons and benefits of the tax before it is implemented. Tax revenues should be allocated, at least in part, to the reduction of health and socio-economic disparities. "
  • Studies on the effectiveness of taxes on sugary drinks have not yielded consistent results. For example, the Philadelphia Inquirer has summarized five studies on the impact of the tax on sodas in Philadelphia (to learn more about the tax, click here and here). The findings varied, according to the study, from the decrease in the consumption of sugar-sweetened beverages to the absence of a significant decrease in sugar consumption due to the tax. As a result, the Philadelphia City Council last week approved a resolution calling for another study on the effect of the City Tax on sweetened beverages. The new study will badess whether the tax is hurting local businesses. Before approving the new study, the Philadelphia City Council had introduced a bill that could significantly change the city's tax on the soda tax or even eliminate it (Philadelphia Inquirer). The hearings on the bill will not be held until the end of the study.
  • We will continue to report on efforts to tax sweetened beverages and other foods, efforts to abolish these taxes and their effectiveness.
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