unhealthy drinks
What does it mean for soda taxes that diet drinks may be unhealthy?
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International organizations suggest taxes on sugar-sweetened beverages (SSBs), which include the majority of soft drinks, energy drinks, sweetened waters, juices, milk-based drinks, and concentrates used to make soft drinks. These SSBs include most soft drinks, energy drinks, juices, and concentrates used to make soft drinks. According to the most recent data, 106 economies—home to 52% of the world's population—tax SSBs at the moment.
SSB levies increase the cost of taxed beverages while decreasing consumer demand. They can also promote the use of non-taxed, ideally healthier, substitutes. The public health objectives of a tax might be strengthened or weakened by this substitution effect.
What more healthful options ought to be exempt from SSB taxes?
Unsweetened bottled water is without a doubt a healthier alternative and ought to be exempt from SSB charges to promote consumption. It is less apparent, though, whether diet drinks—beverages sweetened with sugar alternatives with low or no calories, commonly referred to as artificial sweeteners—should be prohibited.
Evidence from the UK and Catalonia, Spain indicates that excluding certain drinks from SSB tariffs may significantly encourage their production and usage. In the first three years after the Soft Drink Industry Levy (SDIL) was announced, sales of low- and zero-sugar beverages (excluding unsweetened water) increased much higher than pre-tax trends, both in terms of absolute volume sales and as a percentage of beverages sold.
Although diet drinks are frequently promoted as healthier options, caution is advised.
Aspartame has been labeled "possibly carcinogenic to humans" by the International Agency for Research on Cancer (IARC), the WHO's dedicated cancer research organization, following weeks of media speculation. One of the most popular artificial sweeteners in the world, aspartame is practically unavoidable in diet beverages. The artificial sweetener is classified as carcinogenic to the liver by the IARC based on scant evidence. These findings are in response to a recent WHO recommendation against using artificial sweeteners to manage weight.
While concurrently releasing a summary of its most recent risk assessment on aspartame, the Food and Agriculture Organization/WHO Joint Expert Committee on Food Additives deemed the evidence for human cancer to be "not convincing" and reiterated the daily intake limit of 40mg/kg body weight.
How to implement these new results into tax policy is probably something that governments are considering. To find out what nations are currently doing, we examined the World Bank Global SSB Tax Database, an open source of information on SSB tax structures globally.
In many countries, especially those with lower incomes, diet drinks are already subject to taxes.
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Diet drinks, or beverages with artificial sweeteners, have been singled out by some governments as candidates for taxes, including those in Croatia, Poland, Spain, and the Philippines. In the Philippines, for instance, drinks with added sugar or artificial sweeteners are subject to an excise tax of PHP 6 per liter, whereas drinks with high-fructose corn syrup are subject to a PHP 12 excise tax per liter.
However, more frequently than not, diet beverages are automatically subject to SSB levies. This is so that added sugar and artificial sweeteners can't be distinguished by the Harmonized System of Tariff Codes, which is used to identify products subject to tax.
What factors are taken into account if governments seek to tax diet beverages?
The most recent recommendations for artificial sweeteners will need to be carefully taken into account when it comes to diet drinks, along with other aspects like tax aims, regional beverage market structure, and potential substitution impacts.
Although there is currently little evidence, it is nevertheless possible that using artificial sweeteners could have a negative impact on one's health. This indicates the need for prudence, with a focus on promoting substitution for less sugary beverages. Making ensuring that unsweetened bottled water is encouraged as the healthiest alternative and exempt from SSB levies is a priority right away. Unsweetened bottled water is currently subject to over a third of all SSB taxes worldwide, and more than half of taxes in low-income areas.
At the same hand, given the market opportunities presented (such as for product development and reformulation), omitting diet drinks tends to reduce industry opposition to a levy. Some governments may view this as a chance to pass a new tax, with the option of later improving its design to include products subject to the tax. In other instances, a compelling case backed by ample facts and widespread support for pricing diet drinks may be enough to overcome corporate objections.
Unless a special exception is made, diet drinks will fall under the standard Harmonized System tariff headings for non-alcoholic beverages if governments choose to tax them.
The upcoming tax on SSBs and ultra-processed foods in Colombia is expected to apply to beverages that contain both sugar and artificial sweeteners and is set to take effect in November 2023. Future taxes on unhealthy foods and beverages in other countries may be modeled after this.
It is anticipated that drinks containing both sugar and artificial sweeteners will be subject to Colombia's impending tax on SSBs and ultra-processed foods, which is scheduled to go into effect in November 2023. This could serve as a template for taxes on unhealthy foods and beverages in other nations in the future.
link source- https://blogs.worldbank.org/health/diet-drinks-may-be-harmful-health-what-does-it-mean-soda-taxes
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