Comparing taxes as a percentage of sugar-sweetened beverage prices in Latin America and the Caribbean

Maxime Roche; Miriam Alvarado; Rosa Carolina Sandoval; Fabio da Silva Gomes; Guillermo Paraje

doi:10.1016/j.lana.2022.100257

Comparing taxes as a percentage of sugar-sweetened beverage prices in Latin America and the Caribbean

Lancet Reg Health Am. 2022 Jul:11:None. doi: 10.1016/j.lana.2022.100257.

Authors

Maxime Roche¹, Miriam Alvarado², Rosa Carolina Sandoval³, Fabio da Silva Gomes³, Guillermo Paraje⁴

Affiliations

¹ Centre for Health Economics and Policy Innovation (CHEPI), Imperial College Business School, Exhibition Rd, London SW7 2AZ, UK.
² MRC Epidemiology Unit, Cambridge Biomedical Campus, University of Cambridge School of Clinical Medicine, Institute of Metabolic Science, Cambridge, UK.
³ Pan American Health Organization (PAHO), Washington D.C., USA.
⁴ Universidad Adolfo Ibáñez, Santiago, Chile.

Abstract

Background: Excise taxes can be used to reduce the consumption of sugar-sweetened beverages (SSBs), an important preventable risk factor for noncommunicable diseases. This study aimed to compare novel standardized indicators of the level of taxes applied on SSBs as a percentage of the price across beverage categories in Latin America and the Caribbean.

Methods: We used a method developed by the Pan American Health Organization and adapted from the World Health Organization's tobacco tax share. The analysis focused on the most sold brand of five categories of non-alcoholic beverages. Data were collected by surveying ministries of finance and reviewing tax legislation in effect as of March 2019.

Findings: Of the 27 countries analyzed, 17 applied excise taxes on SSBs. Of these, median excise taxes represented the highest share of the price for large sugar-sweetened carbonated drinks (6·5%) and the lowest for energy drinks (2·3%). In countries where excise taxes were applied on bottled waters, tax incidence exceeded the one applied on most SSBs. Overall, excise tax shares were higher in Latin America than in the Caribbean. Including all other indirect taxes (e.g., value added tax), median total tax shares were between 12·8% and 17·5%. At least two countries earmarked part of SSB excise tax revenues for health purposes.

Interpretation: Excise tax levels are generally low in the region. From a public health perspective, tax rates could be increased, and tax designs improved (e.g., excluding bottled waters). The method describe here provides a feasible and informative way to monitor SSB taxation and could be replicated in other regions and over time.

Funding: Bloomberg Philanthropies through the Global Health Advocacy Incubator.

Keywords: CIF, Cost, insurance, and freight; Fiscal policies; Health economics; IMF, International Monetary Fund; LAC, Latin America and the Caribbean; NCD, Noncommunicable disease; Noncommunicable diseases; Nutrition policy; Obesity; PAHO, Pan American Health Organization; PPP, Purchasing power parity; SSB, Sugar-sweetened beverage; Sugar-sweetened beverages; VAT, Value added or sales taxes; WHO, World Health Organization.

Abstract

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