Countries and jurisdictions that have taxes on sugar-sweetened beverages (SSBs)

With many countries introducing an SSB tax over the past decade, research is now showing the benefits of these policies. High-quality studies, particularly from Mexico,¹² the UK³⁴ and South Africa,⁵⁶ as well as a systematic review and meta-analysis of SSB taxes around the world,⁷ show that these policies increased prices of SSBs, reduced their sale and consumption, and led to reformulation of products to reduce sugar levels. Most of the current data looks at impacts up to three years after the introduction of the tax, with longer-term studies needed to measure the effects of SSB taxes on health. Emerging longitudinal evidence and modelling studies suggest that SSB taxes can reduce body weight and type 2 diabetes prevalence, while improving outcomes related to quality-of-life.⁸⁹¹⁰

Impact of SSB taxes: international case studies

Mexico

1. Reduction in the volume of SSBs purchased. By 2016, there was a 37% reduction in the total volume of SSBs purchased, compared to the year before the tax was introduced.²
2. Reductions in SSB purchases were greatest among poorer households and those that previously purchased high amounts of SSBs.¹¹¹
3. Over 10 years, the SSB tax is predicted to prevent 239,900 cases of obesity; of these, 39% would be in children. This drop in obesity is expected to prevent 5,840 disability-adjusted life-years.¹⁰
4. The tax is predicted to be highly cost effective. By reducing costs such as healthcare, the tax would save almost $4 per $1 spent on its implementation.¹⁰

The United Kingdom

An SSB tax, called the Soft Drinks Industry Levy (SDIL), was introduced in the UK in April 2018. The UK tax is a two-tiered levy that taxes producers according to a drink’s sugar concentration, with higher rates for sugar levels above a certain threshold: drinks containing 5 to 8 g per mL of sugar are taxed at £0.18 per L, while those containing more than 8 g of sugar per 100 mL are taxed at £0.24 per L.¹² Manufacturers responded to the UK tax with widespread reformulation of their products to reduce sugar levels. Where sugar levels remained above the taxation threshold, prices were not always raised to reflect the taxed amount: the tax was only passed onto consumers for drinks with more than 8 g of sugar per 100 mL, which underwent an average price increase of £0.075 per L.³

The success of the UK tax in reducing sugar consumption has been demonstrated by high-quality research, with major findings summarised below:

1. The tax led to widespread reformulation to reduce sugar levels in SSBs. This was the equivalent of removing a total of 45 million kg of sugar from soft drinks each year.¹³ More information on reformulation is available from Reformulation of food products to reduce sugar consumption.
2. The proportion of drinks available in supermarkets with high sugar content dropped after the tax. Between 2015 and 2019, the percentage of drinks in supermarkets with sugar content of more than 5 g per 100 mL fell from 49% to 15%.³
3. Sugar levels in SSBs were reduced after the tax was introduced. The sugar content of drinks subject to the tax decreased by nearly 45% four years after the tax was introduced.⁴
4. Sugar purchased from taxed drinks decreased by 35%. This reduction was largest (38.5%) in the households where the main wage earner was in a skilled manual occupation.⁴
5. Sugar consumption decreased in both children and adults. Nearly one year after the tax, daily free sugar intakes from food and soft drinks were nearly 5 g and 11 g lower in these populations, respectively. Sugar consumption from soft drinks alone decreased by about 3 g and 5 g in each population, demonstrating their significant contribution of sugar to the diet.¹⁴
6. The tax is predicted to improve the health of children and adolescents, particularly in low socioeconomic areas. One modelling study reported that 10 years after implementation, the tax could reduce dental caries and overweight/obesity prevalence among those under 18 years by 3,600 and over 64,000 cases, respectively, while increasing quality of life and life expectancy. These changes were greatest in areas of lower socioeconomic status, suggesting the SDIL may reduce health inequalities.¹⁵
7. The majority of fruit juices, juice drinks and smoothies targeted to children and in children's lunch boxes were not eligible for the UK tax. Most of these drinks did not meet eligibility requirements for the UK tax, usually because they were made with fruit juice or pureed fruit without other added sugar, despite having over 5 g of sugar per 100 mL. As a result, researchers suggested adapting the UK tax to include these drinks.¹⁶

South Africa

In 2018, South Africa introduced a 10% tax, called the Health Promotion Levy (HPL), on sugary drinks, excluding fruit juices. The tax of 0.021 ZAR per g of sugar was applied to drinks with over 4 g of sugar per 100 mL.⁵ While prices of taxable non-carbonated drinks did not increase after the policy’s introduction, prices of both low- and high-sugar carbonated drinks increased by an average of 1.006 ZAR per L.¹⁷

The success of the HPL has been described by a number of studies:

1. Fewer carbonated drinks were purchased in urban areas. Purchases of carbonated drinks by households fell by an average of 29% after the tax was introduced. The amount of sugar purchased in these drinks fell by 51% due to both behaviour change and reformulation.¹⁷⁵¹⁸
2. People in lower socioeconomic groups purchased considerably less sugar in drinks that were subject to the tax. There was a 57% drop in the g of sugar purchased in taxed drinks by people in lower socioeconomic urban households.⁵¹⁹ In addition to reformulation, the total volume of taxed drinks purchased was reduced, indicating a behaviour change.¹⁹
3. Beyond changes in consumer purchases, manufacturers reformulated drinks to contain lower sugar levels. Reformulation began after the pre-tax announcement and continued one year after implementation, with sugar content decreasing by nearly 5 g per capita per day (-32%). While researchers could not determine whether these changes resulted from the policy itself or consumer demand after its implementation (e.g., wanting lower priced items), this finding suggests that SSB taxes can motivate manufacturers to develop healthier drink options.⁶

SSB taxes in other countries

Research on the effects of SSB taxes is continuing in many other countries, with some highlights presented below:²⁰

Portugal: A two-tiered SSB tax was introduced in Portugal in 2017 at a rate of €0.8 per L and €0.16 per L for drinks with sugar contents of <80 g per L and ≥80 g per L, respectively. Nearly 100% of the tax was passed on to consumers.²¹ A 7% reduction in SSB sales was reported in the first year, with reformulation leading to an 11% reduction of total energy intake through SSB consumption.²²

Chile: Until 2013, Chile had a 13% tax on non-alcoholic drinks. In 2014, this tax was raised to 18% for soft drinks with at least 6.25 g of sugar per 100 mL and decreased to 10% for soft drinks under this threshold of sugar.²³ The prices of high-sugar soft drinks increased by an average of 1.9% and decreased by 1.7% for the low-sugar soft drinks.²³ After one year, there was a 22% reduction in the volume of higher-taxed drinks sold, but no change in the overall purchase of soft drinks; this indicates that some consumers switched to drinks with lower sugar content.²³

United States (US) regional and city-based taxes: SSB taxes have been introduced in specific regions and cities in the US.²⁰

• A 1¢ per fl oz SSB tax was introduced in Berkeley, California in 2015, resulting in an average price increase of 0.83¢ per fl oz.²⁴ One year after the introduction of the tax, there was a 20% decrease in SSB consumption.²⁴ These reductions were maintained for at least three years and occurred in demographically diverse neighbourhoods.²⁵
• A 1.5¢ per oz tax on SSBs (including diet soft drinks but excluding fruit juices and milk drinks) was introduced in the city of Philadelphia in 2017. The tax was fully passed on to consumers, leading to a price increase of 21% for the taxed drinks one year later.²⁶ There was an average reduction of 8.5 oz (251 mL) of taxed beverages purchased per shopping trip in Philadelphia the year after the tax,²⁶ with sustained reductions in volume sales of SSBs after two years.²⁷ Even after accounting for cross-border shopping (e.g. from nearby towns without the tax), there was a 35% overall reduction in SSB sales across the city.²⁷ Adults in Philadelphia reduced their consumption of sugars from SSBs by an average of 6 g per day after one year of the tax, but the same effect was not seen in children.²⁶ There was also reduced availability of SSBs in stores the year after the tax, as stocks of taxed drinks decreased, while stocks of water increased.²⁸

List of countries and jurisdictions with an SSB tax

Collectively, over 130 jurisdictions have implemented SSB taxes at the national or subnational level. For more information on these taxes around the world, visit the World Bank’s Global SSB Tax Database.

The countries and jurisdictions that have SSB taxes are listed below, with details including the implementation date and type of tax used. Some locations have adopted a tiered tax design, which applies different tax rates depending on factors such as the sugar content or beverage type.

The table below uses the following definitions:

Type of tax

• Excise tax – a tax levied on a particular product at point of manufacture. An excise tax can be:
  • Specific – based on quantity (e.g. volume or sugar content);
  • Ad valorem – calculated on a percentage of the wholesale or retail price²⁹; OR
    
  • Mixed – containing both specific and ad valorem elements.
• Value-added tax/Goods and services tax – a consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to point of sale.
• Import tax – a tax placed on a product imported for domestic consumption and usually collected at the port of entry.
• Sales tax – a tax levied on the sale of a product and often calculated as a percentage of the retail price.

Tax design

A specific excise tax can be calculated on the volume of the drink (volumetric), its sugar content, or a combination of both the volume and sugar levels.

Tiers

A tiered excise tax applies different rates depending on factors such as sugar content or beverage type. For example, the United Kingdom’s SDIL has different rates for drinks containing 5-8 g and over 8 g of sugar per 100 mL, while Mali taxes carbonated sweetened waters at 10% versus juices and concentrates at 12%.

See How should an Australian tax on sugar-sweetened beverages be designed for more details.

Summary of SSB tax designs