Sugar-Sweetened Beverage in The Region of The Americas: Taxation

Sugar-sweetened
beverage taxation
in the Region of
the Americas
Sugar-sweetened
beverage taxation
in the Region of
the Americas
Washington, D.C., 2020

Sugar-sweetened beverage taxation in the Region of the Americas
© Pan American Health Organization, 2020
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Contents
Preface iv
Acknowledgments v
Acronyms and abbreviations vi
Introduction 1
1. Economic concepts 4
1.1 Economic rationale for sugar-sweetened beverage (SSB) taxes 4
1.2 Economic costs of obesity. 4
2. Key elements for SSB tax design and implementation 7
2.1 Tax type and structure 7
2.2 Tax base 10
2.3 Tax rate 14
2.4 Current SSB taxes in the Americas 15
3. Tax revenue and earmarking 17
3.1 Revenue generation 17
3.2 Earmarking 19
4. Evidence on the impact of SSB taxes 20
4.1 Impact on SSB prices 20
4.2 Impact on demand for SSBs 22
4.3 Impact on substitution 24
5. Frequent questions and responses about economic impacts of SSB taxation 28
5.1 Distributional impact of SSB taxes 29
5.2 Cross-border shopping 29
5.3 Impact on employment 30
6. Conclusions 32
7. References 33
Appendix A: Characteristics of sweetened beverage taxes: Examples from eight
local-level taxes in the United States 40
Appendix B: Impact of sweetened beverage excise taxes on beverage volume sold,
sales, purchases, and consumption in the Americas based on evaluation
studies published from January 2015 to March 2020, by tax jurisdiction 44
iv
Preface
As policymakers consider taxation of sugar-sweetened beverages
(SSBs) as a policy tool to reduce SSB consumption and reduce health
risks related to such consumption, the documentation and exchange of
experiences and evidence accumulated becomes paramount.
Taxation of sugar-sweetened beverages has been implemented in

more than 73 countries worldwide. In the Region of the Americas, 21
PAHO/WHO Member States apply national-level excise taxes on SSBs
and seven jurisdictions apply local SSB taxes in the United States of
America. While the number of countries applying national excise taxes
on SSBs in the Region is promising, some of these taxes have been
implemented to increase tax revenue, without considering their role
as a health policy instrument. Most of these taxes could be further
leveraged to improve their impact on SSB consumption and health.
This publication provides readers with economic concepts related to

the economic rationale for using SSB taxes and the costs associated
with obesity; key considerations on tax design including tax types,
bases, and rates; an overview of potential tax revenue and earmarking;
evidence on the extent to which these taxes are expected to impact prices
of taxed beverages, the demand for taxed beverages, and substitution
to untaxed beverages; and responses to frequent questions about the
economic impacts of SSB taxation.
v
Acknowledgments
The Pan American Health Organization (PAHO) gratefully acknowledges the following
contributions: Lisa Powell (University of Illinois at Chicago, USA), Fabio Gomes, Rosa
Sandoval, Maxime Roche and Steven Constantinou (PAHO/WHO) contributed to the
conception and design of the work; to the acquisition, analysis and interpretation of
data for the work; and, to the drafting of the work and critical revision for important
intellectual content. Keith Marple (Brandeis University, USA) and Tatiana Andreyeva
(University of Connecticut, USA) contributed to the acquisition and analysis of data
for the work. This report was reviewed by Guillermo Paraje (University Adolfo Ibanez,
Chile); Arantxa Colchero (National Institute of Public Health, Mexico); Chizuru Nishida,
Evan Blecher, Jeremias Paul, Jr., Katrin Engelhardt, and Roberto Iglesias (WHO). PAHO
also acknowledges the support from the Global Health Advocacy Incubator and funding
from Bloomberg Philanthropies.
vi
Acronyms and abbreviations
CU Currency units
CVD Cardiovascular diseases
GST General sales taxes
NCD Noncommunicable disease
NUGAG Nutrition Guidance Expert Advisory Group
PAHO Pan American Health Organization
SDIL Soft drink industry levy
SES Socioeconomic status
SSB Sugar-sweetened beverage
UPC Universal Product Codes
VAT Value added taxes
WHO World Health Organization
1
Introduction
Noncommunicable diseases (NCDs) lead to morbidity and premature
mortality worldwide and the burden of NCDs is a major challenge
for social and economic development. The five principal NCDs are
cardiovascular diseases (CVD), cancers, chronic respiratory diseases,
diabetes, and mental and neurological conditions. These NCDs have
five shared risk factors: tobacco use, harmful use of alcohol, air
pollution, unhealthy diet, and physical inactivity. In the Region of
the Americas, NCDs were responsible for an estimated 5.55 million
deaths (80.7% of all deaths) in 2016. Thirty-nine percent of these NCD-
related deaths occurred prematurely in persons aged 30 to 69 years.
CVD is the leading cause of NCD mortality, accounting for 28% of all
NCD deaths (1). Worldwide, the cost of the five principal NCDs has
been estimated at US$ 47 trillion over the period 2011-2030 (2).
Over the past few decades, obesity/overweight and related NCDs have
progressively increased in every age group and have become the
major cause of death and disability in the Region of the Americas (55%
of all causes in 2012), according to WHO Global Health Estimates (3).
The growing problem of NCDs is occurring in tandem with several
nutritional deficiencies (e.g., low intake of iron, zinc, vitamin A, folate,
and other micronutrients) which result from poverty and unhealthy
diets and remain significant in several areas in the Americas, including
the Andean, Central American, and Caribbean sub-regions.
2
The prevalence of adult overweight and obesity has increased substantially over the
last 20 years in the Region of the Americas (63.7% for males and 61.0% for females, in
2016). The highest prevalence rates are the United States of America (68%), Mexico (65%),
Canada (64%), and the Bahamas (64%) (4). Prevalence rates have grown among children
and adolescents and available data show that 20% to 25% are overweight or obese (5).
Scientific knowledge about the influence of specific dietary intake patterns on the
development of obesity/overweight and other NCDs is fairly robust (6, 7). In particular,
sugar-sweetened beverage (SSB) consumption is linked to obesity, and is independently
related to adverse health outcomes including type 2 diabetes, cardiovascular disease,
dental caries, and osteoporosis (8, 9, 10, 11).
There is growing evidence of the importance of taxes on SSBs as part of a

comprehensive approach to reducing SSB consumption. In addition to reducing
consumption of SSBs and related health risks, public health benefits to the population
can be even higher if tax revenues are used for targeted obesity prevention and for
health promotion programs and efforts. Earmarking some portion of the revenues
may also improve the transparency of the taxation process and use of revenues, which
may increase acceptability of the tax by politicians and the public. Taxes on SSBs have
been described as a triple win for governments, because they 1) improve population
health, 2) generate revenue, and 3) have the potential to reduce long-term associated
healthcare costs and productivity losses (12, 13).
The World Health Organization Technical Meeting on Fiscal Policies for Diet of May
2015 concluded that appropriately-designed fiscal policies, when implemented with
other policy actions, can diminish the obesogenic environment and promote healthy
diets (14). Further, the WHO Global Action Plan for the Prevention and Control of NCDs
(2013-2020) (15, 16) and the Report of the WHO Commission on Ending Childhood
Obesity (17) recommend fiscal policies, taxes and subsidies that discourage unhealthy
diets, create incentives to improve access to healthier foods, and encourage behaviors
associated with improved health outcomes. Fiscal policy is a key part of a package of
regulatory policies, such as marketing restrictions, school food policies, and labeling
of foods, that can help improve the food environment and change behavior. While
a comprehensive strategy is required to control growing rates of overweight and
obesity, and to encourage healthier dietary intake and lifestyles, fiscal policies are
effective complementary tools that have broad reach and can mitigate the obesity
epidemic at a population level. Fiscal policies such as taxes on SSBs are policy actions
recommended by WHO to modify behavioral risk factors associated with obesity and
NCDs, as featured in the updated Appendix 3 of the WHO Global Action Plan (16, 18).
The WHO Nutrition Guidance Expert Advisory Group (NUGAG) Subgroup on Policy
3
Actions has also initiated development of evidence-informed WHO guidance on fiscal

and pricing policies as part of its support for Member States to develop effective
policies enabling food environments that promote healthier diets and nutrition. This
work contributes to achieving the commitments of the Political Declaration of the third
high-level meeting of the United Nations General Assembly on the prevention and
control of noncommunicable diseases to “promote and implement policy, legislative
and regulatory measures aiming at minimizing the impact of the main risk factors for
noncommunicable diseases, and promote healthy diets, and lifestyles” (19).
Taxes on SSBs have been implemented in more than 73 countries worldwide (20). In
the Region of the Americas, 21 Member States of the Pan American Health Organization
(PAHO) apply national-level excise taxes on SSBs, and seven jurisdictions apply local SSB
taxes in the United States of America (20, 21, 22). While the number of countries applying
national excise taxes on SSBs in the Region is promising, some of these taxes have been
implemented to increase tax revenue, without consideration of potential impact as a
health policy instrument to tackle NCDs (e.g., taxing bottled water). Most of these taxes
could be further leveraged to improve their impact on SSB consumption and health (22).
Significant barriers and challenges can be present that adversely impact effective
SSB taxation policy development. Policymakers considering SSB taxes need technical
assistance and references as well as a detailed situational analysis pertaining specifically
to the health situation and goals for their own jurisdiction.
This technical reference is intended to provide assistance as follows: Section 1 presents

economic concepts related to the costs associated with obesity and the economic
rationale for using SSB taxes. Section 2 provides key considerations on tax design
including tax types, bases, and rates. Section 3 outlines the estimation of potential tax
revenue and earmarking. Section 4 provides evidence on the extent to which these
taxes are expected to increase prices of taxed beverages, change the demand for
taxed beverages, and lead to substitution to untaxed beverages. Section 5 provides an
overview of potential unintended consequences and available evidence that counter
the arguments against such taxes.
4
1. Economic concepts
1.1 Economic rationale for sugar-sweetened
beverage (SSB) taxes
The economic rationale for using fiscal policies, in this case taxation, to
address a public health issue such as NCDs is that market failures lead
individuals to overconsume. Negative internalities and externalities,
such as health care costs (excluding out-of-pocket ones) and losses
in productivity may not be accounted for in individuals’ consumption
decisions. Internalities may also lead to overconsumption. For
example, individuals may not have full information on the negative
health consequences and impacts associated with SSB consumption.
And, even if individuals are fully informed, they may not appropriately
discount the future costs of their behaviors. Thus, the rationale
for applying a tax is overconsumption which occurs due to the fact
that the full cost of consumption is not accounted for in the market
price. A “Pigouvian” tax (set equal to the social cost of the negative
externalities) is one way to help internalize the external costs. A fiscal
policy instrument, such as an SSB tax, can change relative prices which,
in turn, can impact behavior choices related to consumption (23). 1
1.2 Economic costs of obesity

SSB consumption is linked to obesity and independently related to adverse
health outcomes including type 2 diabetes, cardiovascular disease, dental
caries, and osteoporosis (8, 9, 10, 11). Obesity is a significant driver of
preventable chronic diseases and high healthcare costs. For example, in
2005, the United States’ annual national medical care costs due to obesity-
related illness in adults have been estimated to be $209.7 billion for adults
(24); and higher body weight for children has been associated with $14.1
billion in additional prescription drug, emergency room, and outpatient
visit costs annually (25). Additionally, for the United States, incremental
per capita medical expenditures and absenteeism and presenteeism costs
associated with obesity have been shown to increase substantially by
obesity status (See Figure 1) (26).
5
Figure 1: Per capita incremental medical expenditures, absenteeism, and presenteeism costs, by
obesity status and gender, United States
$7000
$6000
$5000
$4000
$3000 Presenteeism $
Absenteeism $
Medical $
$2000
$1000
$0
e
e
al
al
al
al
al
al
IM
em
m
Fe
Fe
II
III
IF
de
de
II
III
de
de
ra
de
ra
de
ra
G
ra
ra
ra
G
Notes: Grade I obesity: (30.0 ≤ BMI ≤ 34.9); Grade II obesity: (35.0 ≤ BMI ≤ 39.9); Grade III obesity: (BMI ≥ 40.0).
Source: Data drawn from Table 2, Finkelstein EA, DiBonaventura M, Burgess SM, Hale BC (2010) The Costs of
Obesity in the Workplace. Journal of Occupational and Environmental Medicine. 52(10):971-6.
Obesity is associated with substantial productivity and human capital costs; in particular,
job absenteeism (productivity costs due to employees being absent from work for health
reasons), presenteeism (lower productivity while at work) and premature mortality, which
can create significant costs for employers and the economy each year (27). With respect
to productivity costs attributable to SSB consumption, a study done in Mexico estimated
a total productivity loss of $1.4 billion with 56.9% of the costs stemming from premature
mortality and 41.1% due to presenteeism. Diabetes is the main SSB-related cause of
the productivity loss (92.1% of premature death-related productivity loss and 99.8% from
presenteeism) (28). The economic burden of diabetes is further highlighted in a study of
25 countries in Latin America and the Caribbean, in 2000, where direct healthcare costs
(medication, hospitalization, consultations, and complications) and indirect costs (forgone
earnings due to premature mortality and disability costs) related to diabetes were estimated
to be $10.7 billion and $54.5 billion, respectively ($1.97 billion and $13.14 billion for Mexico;
$996 million and $1.1 billion across three countries in Spanish Caribbean; $218 million
6
and $812 million across five countries for English Caribbean; $828 million and $1.8 billion
for six countries across Central America; and, $6.7 billion and $37.7 billion for 10 countries
across South America) (29).
Finally, it should be noted that the costs of obesity among children extend beyond the
healthcare costs described above. Obesity among children has been shown to be “a
direct cause of morbidities in childhood, including gastrointestinal, musculoskeletal, and
orthopedic complications, sleep apnea, and the accelerated onset of cardiovascular disease
and type-2 diabetes, as well as the comorbidities of the latter two noncommunicable
diseases” (17, 30). It is also associated with delayed skill acquisition in early childhood,
greater school absenteeism, and lower school test scores, and can lead to depression,
stigmatization, and poor socialization, among other social consequences (17, 31, 32). These
burdens, along with obesity itself, will carry into adulthood. Obesity has been shown to be
associated with impairment of individuals’ labor market outcomes (17). Thus, the personal
burden associated with obesity can become a vicious cycle and contribute to ongoing
health and socioeconomic inequities. Figure 2 summarizes overall costs associated with
obesity in children and adults and obesity’s ultimate impact on health and wellbeing.
Figure 2: Overview of costs associated with obesity in children and adults
Summary: Costs of obesity
Childood obestity Adult obestity

Gender, race/ethnicity, SES, region
• Poorer physical health Gender, race/ ethnicity, SES, region

• Poorer physical health • Poorer mental health
• Poorer mental health • Greater direct medical costs
• Greater direct medical costs • Greater work absenteeism
• Greater school absenteeism • Greater work presenteeism
• Delayed skill acquisition • Lower wages
• Lower test results • Greater environmental costs
Lower utility
(Direct health effects and due to increased financial constraints)
Health and wellbeing disparities
Source: Lisa M. Powell. Presented at the Uppsala Health Summit Ending Childhood Obesity: Actions through
Health and Food Equity. Uppsala, Sweden, 2016.
7
2. Key elements for SSB tax design

and implementation
2.1 Tax type and structure
A tax applied to a defined set of products may be used as a policy
instrument to increase the relative prices of such products and
thereby influence individual-level consumption. Consumption taxes
are considered indirect taxes which are passed on to the consumer;
examples include excise taxes, value added taxes (VAT), general sales
taxes (GST), and import tariffs and custom duties. Of these, excise
taxes are of key importance when using fiscal policy to promote health,
given that they are uniquely applied to specific products and thus will
have a direct impact on the relative price of the taxed products, as
opposed to general taxes on a broad range of goods and services. In
other words, excise taxes change the prices of the targeted products
relative to the rest of products and services, with other conditions
remaining the same (ceteris paribus).
VAT and GST taxes generally apply broadly to all products, and
therefore are not considered policy tools that would change the
relative prices of specific products and related consumption behavior.
While VAT tax is typically incorporated into the shelf price, which is
important for impacting behavior decisions, a GST applied at the point
of payment (at the cashier) is less salient and hence a less favorable
tax instrument for impacting behaviors.
8
Import tariffs are used to raise revenue and can influence consumption (such as
discouraging consumption of certain goods and products) and the balance of
trade. Tariffs on products that do not have domestically produced substitutes may
be effective in reducing overall consumption of such products. However, tariffs on
imported products that are also produced domestically will raise the relative price
of the imported products and induce tax substitution (tax avoidance) in favor of the
domestically produced products. Import tariffs may also violate trade agreements.
Thus, import tariffs are not considered a best practice as an effective policy tool aimed
at reducing SSB consumption.
Excise taxes are applied to specific products and are often used as “Pigouvian”
taxes implemented with the intent of inducing a behavior change to correct for the
externalities/internalities associated with overconsumption. Typical examples include
excise taxes on tobacco and alcohol products, gasoline and motor vehicles, and
products packaged in plastic. Excise taxes are also used to tax luxury items and many
other goods as a discriminatory means to raise revenue. Excise taxes apply equally to
domestically produced and imported products and therefore do not violate the trade
agreement principle of non-discrimination based on the origin of products.
Excise taxes may be applied as a specific tax or an ad valorem tax, or a mix of the
two. A specific excise tax is applied as a specific amount per unit volume, or may be
based on beverage characteristics (e.g., sugar content), while an ad valorem excise tax
is applied as a percentage of the value of the product. As described in Box 1, specific
excise taxes have a number of advantages and are generally preferred for a number of
reasons to reduce consumption of specified products. It is important to keep in mind that
specific excise taxes need to be periodically increased; otherwise they will be eroded by
inflation and their effectiveness will be reduced. One way to solve this issue is for the
law to mandate automatic adjustment of specific excise taxes for inflation. Finally, some
view ad valorem excise taxes as more equitable than specific excise taxes, because the
amount of the tax levied will be greater on the higher priced premium brands more
likely to be chosen by more affluent consumers. However, ad valorem taxes widen
the gap between cheaper and premium brands, incentivizing consumers to switch to
cheaper brands and undermining the potential health benefits of the tax.
Specific and ad valorem excise taxes can be applied as either a uniform tax structure
with one unique tax rate, or as a tiered tax structure where the tax rate varies based
on price and/or product characteristics. Tiered tax structures based on price can have
disadvantages of widening price gaps between brands and facilitating tax avoidance
by producers who may manipulate the prices of their products to reduce the tax
9
Box 1: Example of advantages of specific versus ad valorem excise taxes
• Since specific excise taxes are applied on a per unit volume or based on beverage
characteristics (e.g., sugar content) rather than as a function of the value of the product,
quantity discounts are still taxed.
• Specific excise taxes reduce the incentives to switch to less expensive brands.
• Ad valorem excise taxes have more variable impacts on prices; that is, ad valorem taxes
levied on a value set early in the value chain will have a smaller impact on retail prices than
if levied based on the retail price and this impact will vary based on differential markups.
• Ad valorem excise taxes levied earlier in the value chain are more subject to abusive
transfer pricing, where producers and/or distributors set artificially low prices at the
point where the tax is levied and then raise the price further along the distribution
chain. This can be particularly problematic when the industry is highly vertically
integrated.
• Specific excise taxes are relatively easier to administer and are not as susceptible to
industry tax avoidance and evasion, such as under-invoicing in countries which use the
Cost, Insurance and Freight (CIF) or ex-factory price as the base value for ad valorem
excise taxes.
• Tax revenues from specific excise taxes are more stable revenues as they are not as
subject to industry price manipulation.
they face. However, uniform and tiered taxes based on product characteristics such
as sugar content may induce product reformulation. This is similar to the practice of
tiered tax structures for excise taxes on alcoholic beverages where the tax is based
on ethanol content. The supply-side response of reformulation can add to the public
health impact of the tax, but there may also be supply-side responses of increased
marketing of unhealthy products. While most excise taxes on SSBs to date have
generally used a uniform specific excise tax amount per unit volume (e.g. Berkeley,
CA, Boulder, CO, and Suriname) or a uniform ad valorem tax rate (e.g. Barbados and
Saint Vincent and the Grenadines) where all taxed beverage products are subject to
the same tax irrespective of their beverage type (e.g., sugar-sweetened carbonated,
energy, sports, and fruit drinks, etc.) or sugar content, some have implemented
uniform or discrete tiered tax approaches based on sugar content (e.g. Chile, Ecuador,
and Peru). Finally, two countries, El Salvador and Mexico, apply a mixed excise tax
structure on energy drinks, taxing these beverages with both a specific excise tax
and an ad valorem excise tax.
10
Additionally, in comparing specific versus ad valorem excise taxes, it is important to

note that a specific excise tax will differentially change the relative price of different
types of SSBs given that their per unit base prices differ. This point is illustrated in
Table 1 which reports the mean price per ounce (and per 100 ml) of SSB prices by
beverage category in Cook County, IL, USA, in 2017, ranging from a low of 2.68 cents
per ounce (9.06 cents or $0.0906 per 100 ml) for soda to 13.6 cents per ounce (46
cents or $0.46 per 100 ml) for energy drinks. Example 1 shows that based on the
different mean prices by beverage category a specific excise tax in the amount of
one cent per ounce (3.38 cents or $0.0338 per 100 ml) would equate, on average, to
an increase in the price of soda of 37% but only a 7% increase in the price of energy
drinks (assuming full tax pass-through). Correspondingly, as shown in Example 2, a
given ad valorem excise tax applied on the sale price corresponds to different per
unit prices increase across beverage types.
Table 1: Sweetened beverage prices and examples of alternative specific versus ad valorem
excise taxes
Soda Juice Energy Sports Tea/ Overall

Drinks Drinks Drinks Coffee SSBs
Average beverage price in 2.68 3.52 13.60 3.88 4.42 3.45

cents(¢)/ounce(oz) [¢/100 ml] [9.06] [11.9] [45.99] [13.12] [14.95] [11.67]
Example 1: Specific excise 1.00 1.00 1.00 1.00 1.00 1.00

tax of 1¢/oz [3.38¢/100 ml] [3.38] [3.38] [3.38] [3.38] [3.38] [3.38]
Implied ad valorem excise

37% 28% 7% 26% 23% 29%
tax rate on the sale price
Example 2: 20% ad valorem

20% 20% 20% 20% 20% 20%
excise tax on the sale price
Implied ¢/oz specific excise 0.57 0.70 2.72 0.78 0.88 0.69
tax [¢/100 ml] [1.93] [2.37] [9.2] [2.64] [2.98] [2.33]
Notes: Price data were based on Nielsen store scanner data from Cook County, IL, US, 2017.
Source: Data obtained from Powell LM, Leider J, Léger PT (2020). The impact of the Cook County, IL, Sweetened
Beverage Tax on beverage prices. Economics & Human Biology. 37, 100855.
11
2.2 Tax base

A key consideration for policymakers is to define the tax base. That is, defining the
specific products to which the tax will be applied. Within the context of SSBs, the
public health objective to reduce intake of sugars suggests a tax on all SSBs, including
all water-based sugar-sweetened drinks (carbonated drinks, energy drinks, sports/
isotonic drinks, fruit or vegetable juices and drinks), sugar-sweetened coffee drinks,
coffee substitutes, tea and herbal infusions (teas/coffees), sugar-sweetened milks and
dairy based drink products (sugar-sweetened/flavored milks and yogurt drinks), and
concentrates, powders, and syrups used to make SSBs by adding water or carbonated
water. However, even though flavored or sweetened milk is a significant contributor to
children’s SSB intake (33, 34, 35, 36) it has generally been exempted from the tax base
of most targeted beverage excise taxes on SSBs to date. However, all forms of free
sugars are considered a risk factor as indicated in the WHO Guideline: Sugars Intake
for Adults and Children (37). For this reason, the tax base should also include 100% fruit
juices. On the other hand, excise taxes should exempt bottled water. Taxing bottled
water undermines the ability of excise taxes to generate a price differential between
SSBs and non-SSBs and does not incentivize consumers to switch from consuming
SSBs to a healthier alternative.
As noted above, excise taxes on SSBs to date have mostly been applied using a uniform
tax rate either based on volume (specific tax) or on the value of the product (ad valorem)
where the tax base includes all taxed beverage products subject to the same tax rate
irrespective of their sugar content or beverage type. While a uniform ad valorem excise
tax or a specific excise tax based on volume has the important advantage of simplicity
in implementation, it does not provide incentives for consumers to switch to less sugar-
sweetened beverages or for the beverage industry to reformulate products to reduce
content of sugars per serving.
An approach where beverages are taxed at different rates depending on their content
of sugars, i.e., grams (g) of sugar per unit of volume or serving, has been proposed
and implemented in a limited number of countries. In the Region of the Americas, in
2014, Chile created a tiered tax by increasing their SSB tax rate from 13% to 18% on
high-sugar SSBs (>6.25 g sugar/100 ml) and reducing it from 13% to 10% on low- or no-
sugar sweetened beverages (<6.25 g sugar/100 ml, including all beverages with non-
sugar sweeteners). A similar, tax structure is in place in Peru but with three different ad
valorem excise tax rates (25%, 17%, and 12%) defined by sugar concentration thresholds
(respectively: 6 g sugar/100ml, 0.5–6 g, and <0.5 g sugar/100 ml). Outside the Region of
the Americas, the United Kingdom in April 2018 implemented a three-tiered soft drink
industry levy (SDIL) with no tax on beverages with <5 g of sugar/100 ml, and 18 pence/
12
liter and 24 pence/liter on beverages with 5–8 g and >8 g of sugar/100 ml, respectively.
Within two years following the SDIL announcement, there was an 11% reduction in the
content of sugars of SSBs subject to the levy, and the caloric content of such SSBs fell
by 6% (38). And, recent evidence shows that between 2015 and 2018 sales volume sold
of high-sugar (>8 g/100 ml) beverages fell 40% which stemmed from a combination of
reformulation and reduced demand from the tax (39). However, there has not been any
evidence on the overall reduction of sugar available in all drinks, as extra increases in
the intake of low-sugar drinks may compensate the reduction in
high-sugar intake. It should be noted that low-sugar beverages
are also SSBs and have the potential to promote weight gain
and obesity. In order to prevent the increase in sugar intake from
low-sugar beverages, it is important that these beverages are not
exempted from taxes.
SSB taxes can be designed with discrete tiers based on thresholds

across which excise tax rates vary (e.g., Chile, Peru, and the United
Kingdom) or can be based on a continuum (rather than discrete tiers)
of content of sugars in SSBs. In the Region of the Americas, only
Ecuador uses a tax structure with a specific excise tax of 18 cents
in United States dollars or $0.18 per 100 g of sugar on beverages
with >2.5 g of sugar/100 ml, and a lower tier for beverages with
<2.5 g of sugar/100 ml on which an ad valorem excise tax of 10%
is applied. Outside the Region, South Africa implemented a similar
tax structure with introduction of the Health Promotion Levy in
April 2018, consisting of a specific tax of South African rand ZAR
0.021 (approximately 15 cents or $0.15) for each gram of sugar over
an initial threshold of 4 g of sugar/100 ml.
While the tiered tax approach has drawn growing interest globally, questions remain
about the appropriate tax tier thresholds in terms of impacts on consumption,
reformulation, and tax revenue. When considering the design of a tiered SSB tax, a
recent study showed that evidence on the actual distribution of the most commonly
consumed SSBs by sugar content can help inform the choice of meaningful thresholds
for a tiered tax structure (40). For example, Figure 3 reveals multiple clusters of SSB
sales volume by content of sugars and suggested threshold tiers for differential tax
rates at <20 g and <5 g of sugars per 8 ounces (corresponding to cut points at 5 g below
the lower bounds of the clusters). This distance from the cut points to the lower bounds
of the clusters should be determined based on a given jurisdictions’ goals for reducing
sugars intake and inducing reformulation.
13
Figure 3: Distribution of annual sugar-sweetened beverage (SSB) sales volume by sugar content
for all SSBs, United States total, 2018
4000
Annual volume (Millions of gallons)
3000
2000
1000
0
0 5 10 15 20 25 30 35
Grams of sugar per 8-ounce (237 ml)
Source: Powell LM, Andreyeva T, Isgor Z (2020). Distribution of sugar-sweetened beverage sales volume by
sugar content in the United States: implications for tiered taxation and tax. Journal of Public Health Policy.
41:125-138.
2.3 Tax rate

The size of the tax has implications for the expected impact on individuals’ consumption.
Price elasticity of demand is a common metric that measures the percentage change in
quantity demanded arising from a one percent change in price. The price elasticity of
demand for SSBs is estimated to be in the range of −0.8 to −1.3 (41, 42, 43). Thus, based
on an estimated average price elasticity value of −1.0, an excise tax that raises SSB prices
by 25% is expected, on average, to reduce consumption of the taxed product by 25%.
The effective net change in prices for the taxed SSBs depends on the type of tax that
is implemented. Assuming full pass-through of taxes to prices, an ad valorem excise
tax of a given tax rate, applied on the retail price or the retail price excluding VAT, will
by definition increase prices by the given rate. However, if the base value is set earlier
14
in the value chain, such as the producer price, assuming full pass-through, the tax will
increase prices by a lower amount than the given rate. Finally, the percentage change
in price resulting from a volume-based specific excise tax depends on the container
size and the baseline price of the taxed SSBs.
Tax rates need to be sufficiently high to effectively disincentivize consumers from

purchasing SSBs (14). The tax rate will ultimately be determined as part of the country’s
target to reduce consumption.
2.4 Current SSB taxes in the Americas

As of December 2019, in the Region of the Americas, excise taxes on SSBs have been
implemented in 21 PAHO/WHO Member States and in seven jurisdictions in the United
States of America (20, 21, 22). This includes all excise taxes applied on SSBs whether
or not non-SSBs, such as bottled water or non-sugar sweetened beverages, are
excluded. As described in Figure 4, the taxes vary considerably by country and, in the
case of the United States, between jurisdictions, in terms of the types of taxes used,
bases to which the taxes are applied, and the tax rates. In terms of tax design, 15 are
specific excise taxes (Mexico has a mixed design on energy drinks with an additional
ad valorem tax) and 11 are ad valorem excise taxes (El Salvador has a mixed design on
energy drinks with an additional specific tax). Two countries, Dominica and Ecuador,
apply a combined design with some products being subjected to an ad valorem tax
and some to a specific tax but not to both. In terms of exclusions, dairy beverages,
including those that are sugar-sweetened such as chocolate milk, along with 100%
fruit juices, infant formulas, and medically-related beverages have generally been
exempt from these taxes. However, other types of exclusions related to factors such
as whether the beverages are sold in powder or liquid concentrate form or bottled
versus prepared have varied. Similarly, some taxes are imposed on beverages with
any amount of caloric sweetener while others have small thresholds above which the
tax is applied. Appendix A provides an example of differences in sweetened beverage
tax characteristics for the current seven local-level taxes in the United States.
15
Figure 4: Excise taxes on SSBs in the Region

of the Americas, effective March 2019
Seattle WA:
Amount-specific
per unit volume
Philadelphia, PA:
Albany CA: Amount-specific
Amount-specific per unit volume
per unit volume
Berkeley CA: Mexico:
Amount-specific Amount-specific per unit
per unit volume volume (mixed with ad
valorem on energy drinks)
San Francisco CA:
Amount-specific Belize: Amount-specific
per unit volume per unit volume
Oakland CA: Guatemala: Amount-specific

Amount-specific per unit volume
per unit volume Saint Kitts and Nevis: Ad valorem
Boulder CO: Dominica: Combined*
Amount-specific (ad valorem and amount
per unit volume Honduras: -specific per unit volume)
El Salvador: Amount-specific Barbados: Ad valorem
Ad valorem (mixed with amount-specific per unit volume
per unit volume on energy drinks) St. Vincent and the Grenadines: Ad valorem
Suriname: Amount-specific
Nicaragua: Costa Rica: per unit volume
Ad valorem Amount-specific
per unit volume
Panama:
Ad valorem
Ecuador:
Combined* (amount-specific Brazil:
per sugar content and ad valorem) Ad valorem
Peru:
Ad valorem tiered Paraguay:
per sugar content Ad valorem
Bolivia: Uruguay**:
*Combined: At least one type of SSB is taxed by Amount-specific Amount-specific per
an ad valorem excise tax and at least one other per unit volume unit volume
type is taxed by an amount-specific excise tax. No
beverage type is taxed by both. Chile: Argentina:
Ad valorem tiered Ad valorem
** The excise tax on SSBs is structured as an ad per sugar content
valorem tax applied on fixed tax base amounts –
“precios fictos” – per volume varying per beverage
type, effectively operating as an amount-specific
tax and classified as such in this map.
16
3. Tax revenue and earmarking

3.1 Revenue generation
In order to project potential revenue from an SSB tax, the type of tax
needs to be specified and a number of data sources and parameter
assumptions are required. The type of excise tax levied has implications
for whether one needs to use the volume sold (Q; quantity) or sales
value (Price*Q) as the basis upon which to determine revenue. A
specific excise tax applied per unit volume (e.g., one cent in United
States dollars or $0.01 per 100 ml) requires estimates of volume of
SSBs sold. An ad valorem excise tax applied on the sale price (e.g.,
20%) requires an estimate of the sales value of SSBs sold. Sources of
beverage volume data include domestic production data and import
data. Details are needed on beverage types, brands and sugar content
in order to determine tax applicability along with details on beverage
package size to determine volume. Data are also needed on SSB
prices in order to determine 1) the extent of the percentage increase
in price of specific excise taxes, or 2) the sales value to which an ad
valorem tax is applied. Data on SSB prices can be obtained from store
audits or scanner data and, again, details on beverage types, brands,
sugar content, and sizes are needed. Once one has an estimate of
the tax base and the prices of the products in the base (to determine
how much, for example, a specific excise tax would raise the prices),
it is possible to estimate the extent to which the demand will change
once the tax is implemented. In order to do this, the volume will need
to be adjusted for the expected reduction in demand based on an
assumption of the price responsiveness (i.e., the price elasticity of
demand) of consumers. The estimation of tax revenue can then be
derived from these data.
17
The following hypothetical example demonstrates the steps needed to estimate tax
revenue from the introduction of a specific excise tax based on beverage volume.
1) The estimated pre-tax volume sold of SSB is 3.65 million liters (L); 2) The pre-
tax price of SSBs (weighted average across SSB types) is estimated to be 55 CU
(currency units of a given country); 3) A 10 CU per liter excise tax will be levied on
SSBs; 4) Assuming 100% tax pass-through, the 10 CU per liter specific excise tax
implies a 18.2% increase in the price of SSBs; 5) Assuming an elasticity of demand
of −1.2, sales are projected to fall by 795,700 liters; 6) The estimated post-tax volume
sold of SSBs is predicted to be 2.85 million liters; 7) Thus, the estimated tax revenue
is estimated to be 28.5 million CU.
Table 2: Example of SSB tax revenue calculation
SSB specific excise tax of 10 currency units (CU) per liter (L)
Pre-tax volume sold (L) 3,650,000
Pre-tax price per L 55 CU
Tax per L 10 CU
Effective tax rate 18.2%
% change in sales −21.8%
Reduction in volume sold (L) (795,700)
Post-tax volume sold (L) 2,854,300
Estimated tax revenue 28,543,000 CU
Notes: Assumptions include i) 100% tax pass-through; ii) Elasticity of demand, ED = −1.2.
3.2 Earmarking
Earmarking a portion of tax revenue for specific government programs toward health
promotion or other public goods is an aspect of fiscal policies that may help to garner
public support for the tax and leverage public health goals. Earmarking specifically for
programs related to nutrition and physical activity can complement the intended health
impact of the tax. Earmarking toward low-income and minority populations can help to
address health disparities. Appendix A reports on the varied degree of earmarking of
tax revenue across the SSB taxes implemented in the United States. Most of the other
countries applying excise taxes on SSBs in the Region do not earmark tax revenues.
18
Examples of potential programs related to nutrition and physical activity and policies
that could be supported by the tax revenues from an SSB tax include:
• Subsidizing drinking water infrastructure, including in schools;

• Subsidizing fruits and vegetables for low-income populations;
• Subsidizing healthy meals in schools;
• Promoting the implementation of school gardens as a learning tool and to improve
access to fruits and vegetables;
• Implementing an integrated health communication campaign to promote the
importance of reducing SSB consumption;
• Providing sponsorship for youth sports, including government-supported interschool
competitions and sports events; and,
• Providing funding for increased activity facilities and spaces, particularly in
underserved communities.
19
4. Evidence on the impact

of SSB taxes
As policymakers consider the implementation of SSB taxes as a
policy tool to reduce SSB consumption, it is important to have an
understanding of the evidence of the extent to which 1) taxes will
translate into an increase in prices faced by consumers; 2) taxes
will reduce the demand for SSBs; and, 3) taxes will have cross-price
effects on the demand for non-taxed and lower-taxed beverages and
other food and beverage products.
4.1 Impact on SSB prices

Given that the goal of a public health-oriented tax policy is to reduce
consumption of a particular good, in this case SSBs, then the tax must be
passed on to consumers in the form of higher prices. The tax incidence,
that is, the extent to which consumers versus producers/sellers bear
the burden of the tax, depends on the responsiveness (price elasticity)
of demand and supply. If demand is relatively price-insensitive (i.e.,
quite inelastic, price elasticity of demand close to zero) then the amount
of the tax will be mostly passed on to consumers with limited impact
on quantity demanded and sold. Although such a setting may be ideal
for raising tax revenue, it is not conducive for reducing consumption.
In practice, SSBs are normal goods, with either inelastic (i.e., price
elasticity >0 but <1 in absolute value) or elastic (i.e., price elasticity >1 in
absolute value) demand and supply. Therefore, excise taxes generally
lead to some (but not necessarily 100%) pass-through (i.e., a sharing of
the tax burden by consumers and producers) and lower consumption.
In some settings (e.g., non- or little-competitive markets), taxes may
also lead to over-shifting (i.e., pass-through >100%).
20
When interpreting the extent to which taxes are passed through to consumers in the
form of higher prices, it is important to take note of several additional important factors.
First, it is important to note the fact that the impact may be different for given statutory
ad valorem excise tax rates depending on where they are applied in the value chain. For
example, in Barbados, the ad valorem excise tax is applied to the producer price, which
is a lower base value for taxation than the retail price or the retail price excluding VAT. In
Chile, however, the 18% and 10% ad valorem excise taxes are applied to the retail price
excluding VAT. Therefore, even in the cases where statutory ad valorem excise tax rates
may be the same across two countries, if they are applied at different points in the value
distribution chain, their effective impact on prices (and, hence demand) may be different.
A second point to keep in mind when comparing results across national versus local taxes
is that the potential for cross-border shopping in jurisdictions with local taxes may increase
price responsiveness and thereby dampen tax pass-through. Indeed, as noted below there
is evidence from local jurisdictions in the United States showing that tax pass-through is
relatively lower in stores located closer to the border of the taxing jurisdiction. Third, market
structure and related profit margins can also impact the extent of tax pass-through where
instances of larger profit margins will allow firms to absorb part of the tax. Overall, the
extent of the tax pass-through depends on both consumer demand and market structure,
including the opportunity for tax avoidance such as cross-border shopping, extent of profit
margins, and factors related to the type of tax and where it is applied in the value chain;
thus, it is an empirical question.
In terms of the available empirical evidence, as SSB taxes have emerged in the Americas, a
number of studies have assessed the pass-through of these taxes to SSB prices. Of note is
the fact that differences in the extent of tax pass-through exist not just across jurisdictions
but also within jurisdictions across store type and across beverage type. In Mexico, studies
found partial to full pass-through of the SSB tax including over-shifting for soda (44, 45).
In Barbados, the 10% tax, applied early on in the commercialization chain, was found to
increase SSB prices by 5.9% (46). In Chile, the increase in the tax rate on high-sugar SSBs
from 13% to 18% was found to increase prices by approximately about 2-4% (47, 48).
Among the local jurisdictions in the United States, short-run evaluations of the one cent
per ounce SSB tax in Berkeley, CA, found that just under half of the tax was passed on to
consumers, with slightly higher pass-through for soda, some differences by store type,
and lower pass-through in stores located closer to the city limits (49, 50). At one year
post-tax in Berkeley, another study found varying pass-through across store types (51).
Two studies of the Cook County, IL, one cent per ounce tax which covered both SSBs
and non-sugar sweetened beverages found slight over-shifting of the tax (114-119%) onto
beverage prices (52, 53). Two studies of the 1.5 cent per ounce tax in Philadelphia, PA,
21
which also covered both SSBs and non-sugar sweetened beverages found near to full
tax pass-through (54, 55). However, another Philadelphia study found heterogeneity by
store type with full tax pass-through in pharmacies (104%) but partial pass-through in
supermarkets (43%) and mass merchandise stores (58%) (56). A report on the SSB tax in
Seattle, WA, found that the 1.75 cents per ounce tax was almost fully (97%) passed through
to consumers (57); however, another study found a lower level of pass-through (59%) in
Seattle (58). Examining the largest SSB tax to date in the United States of two cents per
ounce in Boulder, CO, the short-run estimated tax pass-through was 79% (59).
4.2 Impact on demand for SSBs

The effect of an excise tax on SSB demand (measured by volume sold, sales, purchases
or consumption) depends on multiple factors. First, as discussed above, it depends
on the extent to which the tax is “passed through” to consumers in the form of higher
prices. Following that, it depends on consumers’ responsiveness to the increased price.
Consumers’ responsiveness to higher SSB prices is referred to in economic terms as
the price elasticity of demand (i.e., the percentage change in quantity demanded as a
result of a one percent change in price). A review of demand studies based on United
States data found the average elasticity for SSBs to be −1.2 (42). A systematic review
with data from low- and middle-income countries has shown estimates for own-price
elasticity ranged from −0.6 to −1.2 (60). Other studies based on data across various
countries in the Regions of the Americas have found in most cases that the demand for
SSBs is price elastic (i.e., price elasticity of demand greater than one in absolute value).
For example, studies from Brazil, Mexico, Ecuador, Chile, and Guatemala estimated
price elasticities of SSB demand of −0.85, −1.06, −1.20, −1.37 (water-based SSBs only),
and −1.39 (water-based SSBs only), respectively (61, 62, 63, 64, 65). The mid-range of
these price elasticities of about −1.2 implies that an SSB excise tax of 20% would be
expected to reduce demand for SSBs by about 24%.
A number of studies have evaluated the impact of these taxes on measures of beverage
volume sold, sales, purchases, or consumption. Appendix B provides an overview of
the data sources, measures, methods, and results from 20 peer-reviewed published
studies. A summary of the results by jurisdiction follows below along with a meta-
analysis to summarize the overall impact for the Region of the Americas.
With regard to national taxes, assessing Mexico’s one peso per liter SSB tax, a number of
studies have consistently found declines (in the range 6-9%) in sales/purchases of taxed
beverages (66, 67, 68, 69) with larger impacts found in some studies and, in particular, for
low-income populations (66, 68, 70), among high SSB consumers (71) and in urban areas
and households with children and adolescents (68). Further, it was found that the impact
22
of the Mexico SSB tax was sustained two years post-tax implementation (7.5% reduction)
(69). Evaluations of Chile’s 2014 tiered tax small increase from 13% to 18% on high-sugar
SSBs and small reduction from 13% to 10% on sweetened beverages with lower or no
sugar content (including non-sugar sweetened beverages), found small reductions in
purchases of high-sugar SSBs, with either no change or small increases in purchases of
sweetened beverages with lower or no sugar content (47, 48). An evaluation of the 10%
SSB tax in Barbados found a 4.3% reduction in SSB sales volume (72).
Eight SSB taxes (two among them applied to both SSBs and non-sugar sweetened
beverages) have been implemented since 2015 in the United States, with one subsequently
repealed. These excise taxes are specific and range from one to two cents per ounce. A
number of United States evaluations of these taxes have been published. Early evidence
from the penny per ounce tax in Berkeley, CA, based on a sample from low-income
areas, found that SSB consumption fell 21% compared to a 4% increase in comparison
cities, while relative water consumption increased 63% compared to 19% in the same
comparison cities (73). Another study found that Berkeley supermarket volume sold of
taxed beverages fell 9.6% compared with an increase of 6.9% in non-Berkeley stores and
that sales of untaxed beverages rose 3.5% in Berkeley versus 0.5% in non-Berkeley stores
(51). Although, this same study found no significant changes in SSB intake when using
individual-level data (51), a recent Berkeley study based on individual-level data three
years post-tax found that SSB consumption fell by 0.55 times per day relative to changes
in comparison areas (74). A study in Seattle, WA, where SSBs are taxed 1.75 cents per
ounce, found that in the first year post-tax implementation volume sold of taxed SSBs fell
by 22% and there was no evidence of this impact being offset by cross-border shopping
(58). A study for Oakland’s one cent per ounce SSB tax found no statistically significant
effects for either purchases (except for soda) or consumption of taxed SSBs (75).
23
Box 2: Methods for meta-analysis of SSB tax impacts
Figure 5 presents results based on a meta-analysis of 23 estimated SSB tax effects on

outcomes of changes in SSB sales, purchases or consumption based on evaluations of SSB
taxes in the Region of the Americas from 20 peer-reviewed papers (three papers included
estimates from two different data sets) published from January 2015 through March 2020.
For each study included, one summary outcome was extracted as the main effect except
where the study used multiple data sets which occurred in three studies. Measures were
selected which estimated the broadest category of taxed beverages available. The most fully
controlled model specifications were selected, and effects net of cross-border shopping were
taken where available. Relative measures were selected over absolute measures, objective
measures over self-reported, and frequency measures over likelihood measures. When only
individual post-tax time period effects were reported, the final period compared to baseline
was selected. And, when only subgroup effects were reported they were combined (79).
When necessary, variance was estimated from the p-value and degrees of freedom (79).
Absolute effects were converted into relative effect measures by dividing both the effect
size and the confidence intervals by the baseline.
To estimate each policy’s impact in terms of the percentage change in impact relative to the
percentage change in the price of taxed beverages that occurred post-tax, a baseline pre-
tax price was obtained for each jurisdiction in the pre-tax year of the policy using reported
prices from published literature, or from the UN Comtrade database for national studies (80,
81). A random effects inverse-variance weighted meta-analysis of peer-reviewed published
study price effects was conducted, stratified by jurisdiction, and these local pass-through
rates were used to create estimates of each policy’s effective change in price.
Finally, each study’s main policy effect was then converted into an elasticity by dividing it by
the policy’s effective percentage price change. These elasticities (percentage change demand
[volume sold, sales, purchases, or consumption] due to a one percent change in price) were
then combined in one final summary random effects inverse-variance weighted meta-analysis.
This analysis generated an overall elasticity estimate of the tax elasticity of demand for SSB
for the Region of the Americas. All meta-analyses were undertaken using Stata 15.1 (82).
With regard to local jurisdictions in the United States that impose excise taxes applicable
to both SSBs and non-sugar sweetened beverages, an evaluation of the 1.5 cents per
ounce tax on both SSBs and non-sugar sweetened beverages in Philadelphia, PA, found a
reduction in the odds of daily regular soda (−40%) and energy drink (−64%) consumption
(76). Another Philadelphia study found that purchases of taxed beverages fell, but found
no significant changes in consumption measures (55). A study based on sales data from
food stores found a 48% reduction in the dollar sales of taxed beverages (77). A study
24
based on store scanner data for Philadelphia found a 51% reduction in volume sold of
taxed beverages in the taxed jurisdiction with a net decrease of 38% when accounting
for cross-border shopping (56). A study of the Cook County, IL, one cent per ounce tax
on SSBs and non-sugar sweetened beverages (repealed after four months) found a 27%
reduction in sales volume of taxed beverages with a net reduction of 21% after accounting
for increased sales volume in Cook County’s 2-mile border area (78).
In order to help interpret and summarize these estimated changes in volume sold, sales,
purchases and consumption (referred to as “demand”) following the implementation
of SSB taxes across the various jurisdictions, a meta-analysis of these impacts has
been undertaken. Specifically, for ease of interpretation, the estimated impacts have
been converted into relative impacts based on changes in SSB prices that occurred
in response to the new taxes. This report presents results based on a meta-analysis
of 23 estimated SSB tax effects on demand outcomes based on evaluations of SSB
taxes in the Region of the Americas from 20 peer-reviewed papers (three papers
included multiple estimates based on different data sets) published from January 2015
through March 2020 (papers described in Appendix B). The impacts of these taxes are
summarized in terms of a calculated price elasticity of demand (% change in quantity
demanded resulting from a 1% change in price). Details of the methods of the meta-
analyses are provided in Box 2 (79, 80, 81, 82). Figure 5 provides a summary of the
elasticity measures for each taxing jurisdiction and shows that on average across all
study findings, the price elasticity of demand for SSBs is estimated to be −1.36. Thus,
based on the peer-reviewed tax evaluation studies reviewed herein, a tax that raises
SSB prices faced by consumers by 25%, for example, is expected to reduce demand
for SSBs by 34%.
4.3 Impact on substitution

It is important to understand substitution patterns that follow the introduction of an SSB
tax. Consumers might substitute away from taxed products toward untaxed products as
a result of changes in relative prices. Indeed, there may be cross-price/tax substitution
to products outside of the taxed product category that would represent an unintended
consequence. However, if the tax base captures the full range of targeted products then,
for example, substitution of the form from taxed SSBs to untaxed water or milk would
represent an intended consequence and, increase the positive health impact of the tax.
Consumers might also substitute across taxed products and aim to avoid the tax.
For example, in the presence of an ad valorem excise tax, to minimize the impact of
the tax, consumers may substitute down to cheaper brands or cheaper (per volume)
25
Figure 5: Meta-analysis of impact of SSB taxes in the Americas, peer-reviewed tax evaluation
papers published from January 2015 to March 2020
Price elasticity of demand for SSBs

Adjusted for local policy pass-through and cross-border shopping
Study
ID ES (95%CI)
Barbados, Alvarado (2019) (72) -0.73 (-0.83, -0.61)

Chile, Caro (2018) (47) -1.20 (-2.44, 0.05)
Chile, Nakamura (2018) (48) -9.95 (-13.47, -6.44)
Mexico, Colchero (2016) (66) -1.38 (-2.10, -0.67)
Mexico, Colchero (2016) (67) -1.66 (-2.89, -0.42)
Mexico, Colchero (2017) (69) -1.72 (-2.92, -0.53)
Mexico, Colchero (2017) (68) -1.43 (-1.70, -1.16)
Mexico, Ng (2019) (71) -2.09 (-7.02, 2.85)
Mexico, Pedraza (2019) (70) -4.27 (-5.49, -3.05)
US, Berkeley, Falbe (2016) (73) -2.94 (-5.15, -0.06)
US, Berkeley, Lee (2019) (74) -5.39 (-7.94, -2.94)
US, Berkeley, Silver (2017) (51) -1.18 (-1.21, -1.14)
US, Berkeley, Silver (2017) (51) -2.43 (-6.52, 1.66)
US, Cook County, Powell (2020) (78) -0.69 (-0.79, -0.59)
US, Oakland, Cawley (2020) (75) -8.27 (-20.23, 3.69)
US, Oakland, Cawley (2020) (75) -0.89 (-10.00, 8.21)
US, Philadelphia, Baskin (2019) (77) -2.12 (-2.79, -1.45)
US, Philadelphia, Cawley (2019) (55) -2.71 (-5.31, -0.12)
US, Philadelphia, Cawley (2019) (55) -0.35 (-1.32, 0.61)
US, Philadelphia, Roberto (2019) (56) -0.77 (-2.98, 1.45)
US, Philadelphia, Zhong (2018) (76) -1.76 (-2.77, -0.13)
US, Philadelphia, Zhong (2020) (94) -0.64 (-2.52, -1.23)
US, Seattle, Powell (2020) (58) -1.11 (-1.27, -0.96)
Overall -1.36 (-1.61, -1.12)
NOTE: Weights are from random effects analysis
-9 -7 -5 -3 -1 0 1 3 5
Source: Prepared by Keith B. Marple (Brandeis University), Lisa M. Powell (University of Illinois at Chicago) and
Tatiana Andreyeva (University of Connecticut).
package sizes of taxed products. More generally, due to their affordability, consumers
may substitute down to lower cost products. Finally, consumers may substitute the
location where they purchase their products as part of tax avoidance strategies (e.g.,
outside of the border of a jurisdiction for local tax). The extent to which consumers may
undertake various tax avoidance behaviors will change the net impact of a given tax.
With respect to substitution across beverage types, based on studies that have estimated
models of beverage demand, there is generally consistent evidence of substitution
across different types of beverages in response to changes in relative prices, such
26
as substituting for bottled water and milk in response to higher SSB prices (83, 84).
This also reinforces the need for tax design to cover all SSB categories to avoid
undesirable substitutions from taxed to untaxed SSBs, where reductions in soda
consumption could be offset by increases in consumption of other high-calorie drinks,
for instance. With respect to results from tax evaluation studies, several studies have
found increases in demand for untaxed beverages, particularly bottled water, following
the introduction of SSB taxes. For example, results from evaluations from Mexico found
that sales of untaxed beverage increased 2.1% and plain water increased 5.2% over a
2-year post-tax period (69) and purchases of water increased by 16.2% (68). Evidence
from the 10% ad valorem SSB excise tax in Barbados found a 5.2% increase in sales
volume for non-SSBs (72). In the United States, evidence from local tax evaluations
has been mixed in terms of the extent of substitution to untaxed beverages. Studies
have reported increases in consumption/sales of water for Berkeley, CA (51, 73) and
Philadelphia, PA (76). However, evaluations in Cook County, IL, and Philadelphia, PA,
that drew on large samples of Universal Product Codes (UPC) found no significant
increases in volume sold of untaxed beverages (56,78).
Because SSB tax evaluations to date have mostly used aggregated sales scanner
data or cross-sectional individual-level purchase/consumption, there is still little
evidence on the extent to which consumers may be brand switching to lower cost
brands or switching to different volume sizes, such as the one from Barbados, which
found substitutions for cheaper beverages (72). Further, evidence is lacking from tax
evaluations on the extent to which consumers may be substituting to other sources of
“sugars” such as purchasing more sweets or other unhealthy food and drink products,
such as salty snacks or alcohol. A few studies have examined substitution between
beverages and other sources of calories, concluding that increases in SSB prices will
lead to some substitution to various foods, partially offsetting the reductions in the
intake of sugars and/or calories from reduced consumption of the higher priced SSBs
(85, 86). Such substitutions may offset the intended health benefits of SSB taxes. Tax
evaluations are needed to understand these tax avoidance behaviors and potential
unintended consequences.
27
5. Frequent questions and

responses about economic
impacts of SSB taxation
A number of different arguments are often used in opposition to the
implementation of SSB taxes. These arguments usually come from
industry or retail groups associated with the taxed beverages. The
SSB industry often claims that the taxes will not work—that is, they
will not increase prices or have the intended impacts of changes in
consumption. However, as demonstrated above, there is clear evidence
that recent SSB taxes have increased prices faced by consumers and
have reduced the demand for taxed products. In addition to claims that
taxes will not work, arguments are repeatedly made with regard to
a number of negative unintended consequences including that SSB
taxes will adversely hurt the poor given regressivity of consumption
taxes, that there will be extensive tax avoidance through cross-border
shopping (for local taxes), and that SSB taxes will lead to job losses.
The following sub-sections draw on empirical evidence to address each
of these areas of concern.
28
5.1 Distributional impact of SSB taxes

Consumption taxes are generally a regressive form of taxation for raising tax revenue
since lower-income individuals spend a relatively higher proportion of their income
on consumption and allocate a relatively smaller portion to savings. However, from a
public health vantage, such taxes may actually be progressive. It is important to keep
in mind the following key points. First, the public health purpose of an SSB tax is to
reduce consumption of these products. Second, the burden of health expenditures (e.g.
out-of-pocket expenditures) may be relatively higher for low-socioeconomic status
households and therefore the economic burden associated with SSB-related diseases
becomes higher for them. Where SSB consumption tends to be higher among lower
socioeconomic status groups (SES), the health burden associated with consumption
would be higher for these groups. Third, lower-SES individuals tend to be more price
sensitive and therefore are expected to respond to SSB taxes with larger reductions
in consumption. For example, price studies have demonstrated higher SSB price
responsiveness among lower- versus higher-SES populations in Brazil, Mexico, and
the United States (61, 87, 88, 89). As a specific example, in Brazil, a 10% increase in the
price of SSBs was estimated to reduce calories consumed from SSBs by 10% among the
poor and by only 6.3% among the non-poor (61). Additionally, recent tax evaluations
have demonstrated larger reductions in SSB demand among lower versus higher-SES
populations following SSB tax implementation (66, 68, 71). Fourth, tax revenues could
contribute to correcting inequities when channeled to support low-SES populations.
Thus, with all of this taken into account, the health benefits, and the reduction in health
care costs from a tax on SSBs is likely to be progressive.
5.2 Cross-border shopping

The SSB industry and related businesses argument of tax avoidance related to cross-
border shopping is only pertinent to the implementation of local area taxes where
opportunities are present for consumers to easily shop in adjacent jurisdictions
without SSB taxes. In that regard, the argument has primarily been made within the
United States. Several evaluations of the local-level sweetened beverage taxes in the
United States have examined the extent of cross-border shopping associated with
those taxes. A study of the Philadelphia, PA, tax found that cross-border shopping
in the neighboring zip codes offset the decrease in volume sold of taxed beverages
in Philadelphia by 24% (56). Another paper that examined cross-border shopping
patterns found that although there was no evidence that Philadelphia residents were
more likely to travel outside of Philadelphia to shop as a result of the tax, those who
already shopped outside of the city increased their purchases of taxed beverages (55).
Further, a study of the Cook County, IL, sweetened beverage tax found cross-border
shopping in the 2-mile border area of Cook County offset the reduction in volume
29
sold of taxed beverages by 22% such that the gross effect from the tax fell from a
27% reduction to a net effect of a 21% reduction in volume sold (78). However, unlike
the local taxes in Philadelphia and Cook County, a recent study of the local SSB tax
in Seattle, WA, found no significant change in volume sold of taxed beverages in the
2-mile border area (58). These mixed results suggest that when cross-border shopping
does occur, it somewhat offsets part of the tax impact but by no means does it fully
wipe it out. Geographic context and the proximity with which the population lives to
the borders are important considerations for whether in fact it will occur and by how
much. Cross-border shopping is not expected to be an issue for countries that are
considering national-level SSB taxes.
5.3 Impact on employment

The SSB industry and related businesses have argued that the reduction in demand
for taxed SSBs will lead to significant job losses. However, it is important to keep in
mind that money not spent on taxed beverages is likely to be spent on other non-taxed
beverages and other products and services in the economy. That is, while there may be
lower demand for the taxed beverages and some related job losses in the SSB industry,
as consumers reallocate their spending to non-taxed beverages and other goods and
services, new jobs will be created in the economy. Additionally, it should be noted
that some of the lost sales for taxed SSBs will be made up in part from substitution by
consumers to untaxed beverages, often made by the same companies. Thus, there will
be a structural shift in the economy similar to what occurs as consumer preferences
shift over time for a number of given reasons. Job losses are expected to be made up
by job gains in other sectors as consumers shift their spending away from taxed SSBs
to other goods and services. Government spending from the additional tax revenue will
also generate new jobs. A recent systematic review of the macroeconomic impacts of
diet-related fiscal policy highlighted the fact that industry-sponsored work has tended
to report job losses associated with SSB taxes whereas non-industry funded research
has not (see quotation from the review’s conclusions in Box 3) (90).
An economic simulation study of the impact of SSB taxes on employment for two
states (California and Illinois) in the United States showed no net reduction in jobs
(91). Recent evaluations of SSB taxes in Mexico and the United States have reached
similar conclusions. An evaluation study from Mexico revealed no significant changes
in employment associated with the SSB and nonessential food taxes in their respective
manufacturing industries or in commercial establishments, nor did they find an
increase in unemployment following tax implementation (92). An evaluation study for
Philadelphia, PA, found no statistically significant pre- to post-tax changes in monthly
unemployment claims in Philadelphia relative to claims in adjacent counties (93).
30
Box 3: No robust evidence that SSB taxes lead to job losses
A study by Mounsey, Veerman, Jan and Thow (2020) analyzed policy and prevention: “We found
no robust, high-quality evidence for a negative macroeconomic impact from implementing
diet-related fiscal policies. Policy makers must be aware that the majority of the limited
evidence available for the macroeconomic impact of diet-related taxes was from industry-
funded reports. Similar to the introduction of tobacco and alcohol taxes, we question if
industry has sought to influence health-related fiscal policies through the sponsorship of
studies. This is because we found their reports to be based on selected outcomes providing
partial measures of the gross economic impact across sectors and based on questionable
assumptions such as over-shifting of pass through rate or the products used in the analysis.
In contrast, the three non-industry supported peer-reviewed academic studies found none
of the significant job losses industry reports suggested, but found instead, no significant net
decline in employment and job creation” (90).
To the extent that there are concerns about job losses within the taxed or related sectors,
governments can dedicate some of the additional tax revenues to programs to facilitate
needed job transitions. For example, funds could be dedicated to assist agricultural
transition from sugarcane production to other types of farming. Also, for example, tax
revenue allocated in the form of subsidies to fruits and vegetables would increase the
demand for those products to the benefit of farmers, distributors, and retailers.
31
6. Conclusions
SSB excise taxes are an effective evidence-based NCD prevention policy.

Along with tobacco and alcohol excise taxes, they are a tool to attain the
Sustainable Development Goals, and are recommended by the World
Health Organization to modify behavioral risk factors associated with
obesity and NCDs, as featured in the WHO Global Action Plan. Indeed,
these taxes represent a triple win for governments as they improve
population health by reducing the consumption of SSBs, generate
tax revenue, and have the potential to reduce long-term associated
healthcare costs. In addition, in synergy with other regulatory measures
on marketing, labeling, and school and other settings, SSB excise taxes
create an enabling environment for effective, systemic, and sustained
improvement of diets, health, and food systems.
As expressed in this document, SSB excise taxes are likely to have a

progressive net effect as low-income individuals tend to be more price
responsive and their positive health impact and related reductions in
healthcare costs will reduce associated burdens to a greater extent
among low-SES individuals. In addition, scientific evidence shows that
SSB excise taxes have no proven adverse impact on employment.
While the number of excise taxes on SSBs in the Region of the Americas
is promising, some of these taxes have been implemented to increase
tax revenue, without considering the design of the tax as a health
policy instrument. There is a high diversity in tax design across the
Region and most of these taxes could be further leveraged, in terms
of tax structure, tax base or tax rates, to improve their impact on SSB
consumption and health. Finally, several excise taxes have not been
evaluated and future research should aim to address this gap.
32
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39
Appendix A:
Characteristics of sweetened
beverage taxes: Examples
from eight local-level taxes
in the United States
40
Site Effective Type of Tax Applicability Beverage Revenue

and bill/ date tax rate exemptions allocation
ordinance
Berkeley, CA March 1, Excise $0.01 SSBs (>2 calories per Exempted drinks: City of
2015 (Specific) per fluid ounce) • beverage in which milk Berkeley’s
Measure D
ounce Any beverage intended is primary ingredient General Fund
Ordinance for human consumption • natural fruit and
Expert
No. 7,388- to which one or vegetable juice
Advisory
N.S. more added caloric • alcoholic beverages
Committee to
sweeteners has been • beverages for medical
recommend
added, which includes use
funding for
caloric sweeteners • infant/baby formula
programs
used to produce SSBs • liquid used for weight
targeting SSB
(e.g., premade syrup, reduction and meal
consumption
powder). replacement
Philadelphia, January 1, Excise $0.015 SSBs and non-sugar SSBs do not include: Quality Pre-K
PA 2017 (Specific) per sweetened beverages • baby formula Program
ounce Any form of caloric • medical food
Bill No. Community
sugar-based • products >50% (by
160176 schools
sweetener, including volume) milk
but not limited to, • product >50% (by Rebuild
sucrose, glucose or volume) fresh fruit, program
high-fructose corn vegetable, or a for parks,
syrup or any form combination of recreation
of artificial sugar the two centers, and
substitute, including • unsweetened drinks libraries
stevia, aspartame, that upon request can
Healthy
sucralose, neotame, have added sugar at
beverages tax
acesulfame potassium point of sale
credit
(Ace-K), saccharin, • syrup or concentrate
and advantame. This that customer combines By 2021, 100%
includes syrups and with other ingredients of tax will go
concentrates. to create beverage to the above
programs.
Albany, CA April 1, Excise $0.01 SSBs (>2 calories per SSBs do not include: City of
2017 (Specific) per fluid ounce) • beverage with milk as Albany’s
Measure 01
ounce Any beverage for primary ingredient General Fund
Ordinance human consumption, • natural fruit and
No. 2016-02 with one or more vegetable juice
added caloric • beverage for medical
sweetener. Includes use
premade SSBs or • liquids for weight loss
mixes/compounds and meal replacement
(e.g., syrup, powders). • infant or baby formula
• alcoholic beverages
Oakland, CA July 1, Excise $0.01 SSBs (>25 calories per Exemptions include: City of
2017 (Specific) per 12 fluid ounces) • infant and baby formula Oakland’s
Measure HH
ounce Any beverage for • beverages for medical General Fund
Resolution human consumption use
No. 86161 with one or more • beverage as
C.M.S added caloric supplemental, meal
sweeteners; this replacement, or sole
includes powders and source nutrition
syrups used to mix and • milk products
make SSBs. • 100% natural fruit or
vegetable juice with no
added caloric sweetener
• alcoholic beverages
41

ordinance
Boulder, CO July 1, Excise $0.02 SSBs (>5 grams of Exemptions include: Funds must
2017 (Specific) per caloric sweetener per 12 • beverages where milk is be used to
Measure 2H
ounce fluid ounces) the primary ingredient improve
Ordinance Beverages with added • beverages for medical health equity
No. 8181, calories and perceived use in Boulder
Chapter as sweet when • infant or baby formula through
3-16, B.R.C. consumed including but • alcoholic beverages the support
not limited to sucrose, • 100% natural fruit of health
dextrose, fructose, or vegetable juice promotion,
glucose, other mono beverages, with no general
and disaccharides; corn added caloric sweetener wellness
syrup or high-fructose (original liquid with or programs,
corn syrup; or any without water added) and chronic
other caloric sweetener • sweetened medications disease
designated by the City. • products used prevention.
Includes bottled SSBs exclusively to mix Additionally,
or SSBs made from alcohol >5 grams or funds will
the dilution of syrup or more per serving of cover the
powder. caloric sweetener per 12 administrative
ounces (e.g., margarita cost of the
mix) tax.
Cook August 2, Retailer’s $0.01 SSBs and non-sugar Exemptions include: Not specified
County, IL 2017 Sales Tax per sweetened beverages • 100% fruit/vegetable
Repealed (Specific) ounce Sweetened juice
16-5931
November beverage means • beverages in which
Ordinance
30, 2017 any nonalcoholic milk, or soy, rice, or
Chapter 74 beverage, carbonated similar milk substitute
Taxation, or non-carbonated is >50%
Article XXII intended for human • beverages to which
Sweetened consumption and purchaser can add, or
Beverage contains any caloric request retailer to add,
Tax, sweetener or non- caloric sweetener or
Sections 74- caloric sweetener and non-caloric sweetener
850 through is available for sale in a • infant formula
74-859 bottle or produced for • medical beverages
sale through the use of • liquids sold as
syrup and/or powder. therapeutic meal
replacements or for
weight loss
• any syrup or powder
purchaser combines
with other ingredients
to make beverage
42

ordinance
Seattle, WA January 1, Excise $0.0175 SSBs (>40 calories per Exemptions include: Birth to Five
2018 (Specific) per 12 fluid ounces) • milk products where programs
CB 118965
ounce Sweetened beverage natural milk is the
Ordinance Programming
includes all drinks and primary ingredient (the
No. 125324 to provide
beverages with added ingredient listed first
healthy food
caloric sweeteners or in which water and
access to
including but not limited grains, nuts, legumes,
low-income
to juice with added or seeds constitute the
residents
caloric sweetener, first two ingredients)
flavored water with • 100% natural fruit or Job training
added caloric sweetener, vegetable juice with for industries
and nonalcoholic mix no added sweetener potentially
beverages that may or (i.e., the original liquid affected
may not be mixed with resulting from pressing
One-time or
alcohol or any other fruits and vegetables)
time-limited
common names that are • concentrate that
projects
derivations thereof. consumer combines
(preschool
with other ingredients
classrooms,
to create beverage
water bottle
• infant or baby formula
filling stations,
• medical beverages
health
• liquids sold as meal
education
replacements or for
programs)
weight loss
• sweetened medication Evaluation
such as cough syrup of the tax;
Administra-
tion of the
tax; Commu-
nity Advisory
Board
San January 1, Excise $0.01 SSBs Exemptions include: City of San
Francisco, 2018 (Specific) per Any nonalcoholic • infant or baby formula Francisco’s
CA ounce beverage intended for • medicinal beverages General Fund
human consumption • supplemental, meal
Measure V Advisory
that contains added replacements, or sole
Committee
Business caloric sweeteners and source of nutrition
and Tax contains more than 25 • milk products, and
Regulations calories per 12 fluid • 100% fruit/vegetable
Code Article ounces of beverage. juice
8: Sugary
Drinks
Distributor
Tax
Ordinance,
Sections
550-560
SSB: sugar-sweetened beverage

43
Appendix B:
Impact of sweetened beverage
excise taxes on beverage volume
sold, sales, purchases, and
consumption in the Americas based
on evaluation studies published
from January 2015 to March 2020,
by tax jurisdiction
44
Author(s), Study Data source Population/ Tax measure/ Outcome(s) Results
year design and time period sample (n) implementation
date
BARBADOS
Alvarado, Interrupted time Electronic point- Major chain Ad valorem excise Volume sold of SSBs. Weekly volume sold of SSBs
Unwin, Sharp, series; controls of-sale data from grocery store tax of 10% on SSBs. Sub-category decreased by 4.3%. Volume
Hambleton, for seasonality, major chain grocery scanner data Effective June 2015. outcome measures sold of carbonated SSBs fell
Murphy, tourism, inflation; store (estimated weekly (1,161 included carbonated by 3.6%.
Samuela, no comparison to represent 32% unique, size- SSBs, other SSBs
Volume sold of non-SSBs
Suhrcke, Adams, group; sensitivity of grocery store specific beverage (incl. sweetened fruit
increased by 5.2%; bottled
2019 with comparison market). products). drinks), waters and
water increased by 7.5%.
site; within-coun- Data available other non-SSBs (incl.
try sensitivity with weekly from Jan no-added sugar (NAS)
non-beverage 1, 2013 to Oct 31, fruit juices).
product. 2016 (141 pre-
intervention weeks
and 59 weeks post-
tax).
CHILE
Caro, Corvalán, Longitudinal Kantar WorldPanel Households Increase in SSB tax Monthly per capita Higher taxed high-sugar SSBs
Reyes, Silva, random effects Chile, Jan 2013 to (urban) rate from 13% to 18% high-sugar SSBs fell by 3.4% (−6.4% for high-
Popkin, Taillie, tobit model; Dec 2015. n=1,795 on high-sugar SSBs (carbonated and SES; low-SES NS).
2018 household Longitudinal (>6.25 g of sugar/100 non-carbonated) • Carbonated high-sugar SSBs
RE; seasonal (weekly) food Two subgroups: ml); reduction in SSB beverage volume and NS overall (−7.2% for high-
(quarters) FE; purchases high SES (high and tax rate from 13% monthly per capita SES; low-SES NS).
counterfactual (interviewers mid-high) and low to 10% on low- or low- or no-sugar • Non-carbonated high-sugar
post-tax trend; collected data SES (mid-low and no-sugar sweetened sweetened beverages SSBs fell 8.2% (NS for high-
estimates by using bar code low) beverages (<6.25 (concentrates and SES; −10.1% for low-SES).
household SES; scanner, receipts, g of sugar/100 ml, ready-to-drink (RTD))
no comparison code book, including all non- beverage volume Reduced taxed low- or no-
group. Study also inventory). Bar sugar sweetened purchased by sugar sweetened beverages
included price code products beverages). households. Monthly increased by 10.7% (9.5%
analysis. linked to nutrition Effective October 1, per capita volume of for low-SES and 10.8% for
facts panel. 2014. untaxed beverages. high-SES).
• Low- or no-sugar sweetened
concentrates increased 9.4%
(10.7% for low-SES and 7.1%
for high-SES.
• Low- or no-sugar sweetened
RTDs increased 12.3%
(12.2% for low-SES and
14.3% for high-SES).
date
CHILE
Nakamura, Longitudinal FE Kantar WorldPanel Households Increase in SSB tax Soft drinks were Higher taxed high-sugar SSBs
Mirelman, model (log of per Chile, Jan 2011 to (urban) rate from 13% to 18% coded in three fell by 21.6% (−31.3% for high-
Cuadrado, Silva- capita volume); Dec 2015. n=2,836 on high-sugar SSBs categories as: SES; −16.4% for middle-SES
Illanes, Dunstan, household FE; Longitudinal (>6.25 g of sugar/100 monthly per capita and low-SES NS).
Suhrcke, 2018 seasonal (quarter) (weekly) household Three subgroups: ml); reduction in SSB volume of high-sugar
FE; no comparison food purchases low, middle and tax rate from 13% SSBs, low- or no- Reduced taxed low- or no-
group. (interviewers high SES to 10% on low- or sugar sweetened sugar sweetened beverages
collected data using no-sugar sweetened beverages, and had no significant changes
bar code scanner, beverages (<6.25 g of untaxed (nonsugary, including by SES.
receipts, code sugar/100 ml, and all nonflavored,
book, inventory). non-sugar sweetened noncolored products) Untaxed soft drink beverage
Bar code products beverages). Effective beverages. volume fell by 23.7% for high-
linked to nutrition October 1, 2014. SES (NS for overall and other
information. SES).
MEXICO
Colchero, DID model; Nielsen Mexico’s Households Specific excise tax of Beverage purchases; Purchases of taxed beverages
Popkin, Rivera, household FE; Consumer Panel n=6,253 1 peso/liter on SSBs; volume per capita. fell by 6.1% in 2014.
Ng, 2016 seasonal (quarter) Services, monthly, (~10% tax based Taxed beverages: • Larger effects for low SES:
FE; counterfactual Jan 2012 to Dec Three subgroups: on 2013 prices). carbonated SSBs, −9.1% for low-SES; −5.5%
post-tax trend; 2014. low, middle and Effective: January 1, non-carbonated SSBs. for middle-SES; and −5.6%
no comparison Household scanner high SES 2014. Untaxed beverages: for high-SES.
group. data. non-SSB carbonated
beverages, water Purchases of untaxed
(plain/sparkling), beverages increased 3.9% in
other (dairy, juice). 2014.
Colchero, OLS regression Monthly Surveys of NA Specific excise tax of Per capita sales Sales of SSBs fell 7.3% for the
Guerrero-López, model with post the Manufacturing 1 peso/liter on SSBs; drawn from NAICS 2-year (2014-2015) post-tax
Molina, Rivera, (2014–2015) vs. Industry (EMIM), (~10% tax based 312111 – Soft Drink versus pre-tax period; −6.2%
2016 pre (2007–2013) monthly, Jan 2007 on 2013 prices). Manufacturing. for 2014; −8.7% for 2015.
tax indicator; to Dec 2015. Effective: January 1, Taxed beverages:
seasonal (quarter) Sales from 2014. SSBs: cola and Sales of plain water increased
FE; no comparison domestic non-cola carbonates 5.2% over the 2-year post
group. production, (incl. diet and sports period; NS in 2014; +11.8% in
including exports. drinks) and fruit drinks 2015.
(<100%).
Untaxed beverages:
Plain water.
45
46
date
MEXICO
Colchero, 2-part estimation National Income Households Specific excise tax of Weekly per capita Purchases of SSBs fell by 6.3%
Molina, model of and Expenditure 2008 n=35,146 1 peso/liter on SSBs; household purchases • Larger effects for low-SES:
Guerrero-López, purchases; Survey (ENIGH), 2010 n=30,169 (~10% tax based of SSBs and water −10.3% for low-SES; −3.7%
2017 comparison 2008, 2010, 2012, 2012 n=10,062 on 2013 prices). (plain and sparkling). for middle-SES; and −5.8%
of changes of and 2104. National 2014 n=21,427 Effective: January 1, SSBs included diet or for high-SES.
adjusted predicted household survey. Analytic sample: 2014. low-calorie sodas but
values for 2014 85,118 not 100% fruit juice. Purchases of water increased
and predicted by 16.2%
values of previous Three subgroups: • Larger effects for low and
round for 2014 low, middle and middle SES: +21.7% for
(counterfactual); high SES low-SES; +20.3%% for
no comparison middle-SES; and +9.6%%
group. for high-SES.
Colchero, Rivera- DID model; Nielsen Mexico’s Households Specific excise tax of Beverage purchases; Purchases of taxed beverages
Dommarco, household FE; Consumer Panel n=6,645 1 peso/liter on SSBs; volume per capita. fell 7.6% over the 2-year 2014-
Popkin, Ng, 2017 seasonal (quarter) Services, monthly, (~10% tax based Taxed beverages: 2015 study period; −5.5% for
FE; counterfactual Jan 2012 to Dec on 2013 prices). carbonated SSBs, 2014; −9.7% for 2015.
post-tax trend; 2015. Household Effective: January 1, non-carbonated SSBs.
no comparison scanner data. 2014. Untaxed beverages: Sales of untaxed beverages
group. non-SSB carbonated increased 2.1% over the 2014-
beverages, water 2015 period; +5.3% in 2014;

(plain/sparkling), −1.0% in 2015.
other (dairy, juice).
Ng, Rivera, DID model; Nielsen Mexico’s Households Specific excise tax of Mean per-capita By 2015, HT beverages
Popkin, household FE; Consumer Panel n=6,089 1 peso/liter on SSBs; purchases of taxed and purchasers (HTLU and HTHU)
Colchero, 2018 seasonal (quarter) Services, monthly, (~10% tax based untaxed beverages. had the largest reductions
FE; counterfactual Jan 2012 to Dec HTLU: n=1,479 on 2013 prices). Taxed beverages in purchases of taxed
post-tax trend; 2015. HTHU: n=1,787 Effective: January 1, included carbonated beverages [16.1% and 20.0%,
no comparison Household scanner LTLU: n=1,437 2014. soft drinks, fruit drinks, respectively; compared with
group. data. LTHU: n=1,386 flavored waters, sport small increases for LTLU
drinks, teas, and other (1.9%) and LTHU (+0.6%)]. HT
beverages with added purchasers also increased
sugar (excluding purchases of untaxed
sweetened dairy). beverages.
Untaxed beverages LU beverage purchasers had
included diet sodas highest increases in untaxed
and bottled water. beverages: 11.3% for HTLU
and 14.0% for LTLU.
date
MEXICO
Pedraza, Popkin, Estimate means Nielsen Mexico’s Households Specific excise tax of Mean per capita Year-over-year changes were
Batis, Adair, for volume, Consumer Panel n=7,038 1 peso/liter on SSBs; household purchases provided.
Robinson, calories, Services, monthly, (338,187 (~10% tax based of taxed and untaxed Change from 2013 (pre-tax) to
Guilkey, Taillie, and sugar of Jan 2012 to Dec household-month on 2013 prices). beverages: volume, 2014 (first year post-tax)
2019 households; 2016. observations) Effective: January 1, calories, and sugar. Tax beverages:
household FE Household scanner 2014.  Volume: −49 ml; −19%
adjusted for data. (p<0.05)
household SES  Calories: −5 kcal; −6%
and composition, (p<0.05)
geographic  Sugars: −1 g of sugar; −6%
area controls, (p<0.05)
seasonality; no
comparison group Untaxed beverages:
or counterfactual.  Volume: +93 ml; +11%
Analyses by (p<0.05)
store type.  Calories and sugar: minimal.
UNITED STATES OF AMERICA
Berkeley, CA
Falbe, Repeated cross- Interview- Adults n=990 Specific excise tax of Consumption of SSB consumption in
Thompson, section, pre- administered pre-tax and $0.01-per-oz on SSBs SSBs based on Berkeley decreased by 21%
Becker, Rojas, post DID design intercept surveys n=1,689 post tax. (soda, energy, sports, beverage frequency and increased by 4% in the
McCulloch, of change in near highest foot- Intervention site: and fruit-flavored questionnaire comparison cities. (The
Madsen, 2016 adjusted mean traffic intersection Berkeley, CA. drinks, sweetened modified from the figures for soda were: −26%
consumption in low-income Comparison sites: water, coffee, BRFSS 2011 module. for Berkeley and +10% for
of intervention neighborhoods. Oakland and San tea, and, syrups). Measure of times of comparison cities; for sports
versus Pre-tax data Francisco, CA. Effective March 1, SSB daily intake was drinks: −36% in Berkeley and
comparison site. collection: April to 2015. derived. +21% in comparison cities).
July 2014. Post-tax:
April to Aug 2015. Water consumption increased
by 63% in Berkeley and by
19% in comparison cities.
47
48
date
Berkeley, CA
Silver, Ng, Ryan- OLS DID models Point-of-sale Scanner data: 3 Specific excise tax of Volume of taxed and 1. Estimates for sales volume:
Ibarra, Smith (log transformed) scanner data stores in Berkeley; $0.01-per-oz on SSBs untaxed beverages sold Volume of taxed beverages fell
Taillie, Induni, for volume; store from 2 large chain 6 Bay area (soda, energy, sports, (oz per transaction) 9.6% in Berkeley and rose 6.9%
Miles, Poti, ID, day, month, supermarkets. Jan comparison stores. and fruit-flavored and revenue from all in non-Berkeley stores.
Popkin, 2017 holidays, and year 2013 through Feb Covered 5,631 drinks, sweetened sales. Sales of untaxed beverages
FE. 2016. unique beverage water, coffee, tea, rose 3.5% in Berkeley and 0.5%
barcodes used. and syrups). Effective Usual intake of kcals/ in non-Berkeley stores.
Cross-sectional Individual-level March 1, 2015. day and g/day of Sales of water rose by 15.6%
pre-post tax 2-part random digit dial Individual-level taxed and untaxed in Berkeley; untaxed fruit,
consumption telephone survey. survey: Adults in beverages (based vegetable, and tea drinks rose
models; no Nov- to Dec 2014; Berkeley; n=623 at on National Cancer by 4.4% and plain milk by
comparison group. Nov to Dec 2015. baseline; n=613 at Institute (NCI) data 0.6%. Sales of diet soft drinks
1-year post tax. collection method). and energy drinks fell by 9.2%.
2. Estimates for consumption:

Mean daily SSB volume
(g) and kcal intake of taxed
beverages fell but not
significantly.
Mean volume intake of

untaxed beverages rose but
NS.
Mean kcal intake of untaxed
beverages rose 27.6%.
Lee, Falbe, Pre-post Repeated annual Adults: Specific excise tax of Beverage frequency Consumption frequency
Schillinger, Basu, intervention- cross-sectional Berkeley: n=2,435 $0.01-per-oz on SSBs (BEVQ-15) for taxed of taxed SSBs in Berkeley
McCulloch, comparison questionnaires. Comparison: (soda, energy, sports, SSB consumption. declined by 0.55 times per
Madsen, 2019 site DID model. Berkeley n=1,513 n=5,141 and fruit-flavored day over 3-years post-tax
Controlled San Francisco and Sample drinks, sweetened relative to no change in
for time FE Oakland n=3,712. from 2 large water, coffee, tea, comparison sites.
and vector of Pre-tax data neighborhoods and syrups). Effective
individual-level collection: April to with highest March 1, 2015. Consumption frequency for
characteristics. July 2014. proportion Black water increased by 1.02 times
Post-tax: April to and/or Hispanic per day over 3-years post-
Oct 2015, 2016, and residents. tax relative to no change in
2017. Matched to comparison sites.
comparison.
date
Cook County, IL
Powell, Leider, Pre-post Store scanner data Data obtained from Retailer tax of Volume sold in oz. DID estimates:
Leger, 2020 intervention- obtained from supermarkets and $0.01-per-ounce on SSBs classified as Volume sold of SSBs fell by
comparison Nielsen. Pre-tax mass merchandise, sugar and non- taxed (soda, energy, 27%.
site DID model. data collection: grocery, sugar sweetened sports, juice and tea/ Net reduction in volume sold
Analysis of 4-month period Aug convenience, drug, beverages. Effective coffee drinks) and was 21% after accounting for
changes in border 2018 to Nov 2018. and dollar stores. August 2, 2018, non-taxed (100% cross-border shopping.
area. Post-tax period: 2,840 taxed and repealed effective juice, milk, water). Implied price elasticity from
Aug 2019 to Sept 1,613 untaxed Nov 30, 2018. Beverages classified study is: −0.8.
2019. Data at the UPCs. by size: individual (≤1 Change in volume sold of
UPC level. L) vs family (>1 L and untaxed beverages: NS.
multipacks).

Oakland, CA
Cawley, Frisvold, Cross-sectional 1. Store exit Adults with ≥ child Specific excise tax of Purchases: volume 1. Purchases: Any purchases
Hill, Jones, 2020 pre-post DID interview survey; aged 2-17 $0.01-per-oz on SSBs of taxed and untaxed of taxed beverages: −4.2
two-part model 2. Longitudinal Oakland: with ≥ 25 calories per beverages purchased percentage points (−16.7%)
(logistic; GLM household survey. n=785 pre-tax; 12 fluid oz. Effective by consumers on that NS;
Poisson); Pre-tax data n=786 post-tax. July 1, 2017. shopping trip. Regular soda: −10.6
Household collection: April to Comparison: Consumption: percentage points
controls; day/ June 2017. n=741 pre-tax; Beverage frequency Untaxed beverages: 10.8
time. Post-tax data n=766 post-tax. (BEVQ-15) for taxed percentage points (52.9 %)
Longitudinal collection: April to Longitudinal: SSB consumption; oz purchased: −11.33 for
differences in June 2018. Oakland n=193 daily added sugar taxed purchases (−58.8%),
outcomes linear Comparison n=218 (grams) intake based NS; NS effects for taxed or
regression on on NCI DSQ. untaxed.
treatment and
2. Change in consumption
controls.
and sugar intake: NS.
49
50
date
Philadelphia, PA
Zhong, Repeated cross- Random-digit-dial Adults: Specific excise tax Daily consumption 2-months post-tax, odds of
Auchincloss, section, pre-post phone survey; n=899 from of $0.015-per-oz on (≥30 times during past daily soda and energy drink
Lee, Kanter, 2018 DID logit and modified BEVQ-15 Philadelphia, SSBs and non- 30 days), 30-day total consumption was 40% and
negative binomial survey. PA; n=878 from sugar sweetened consumption volume 64% lower, respectively.
regression Pre-tax data comparison sites: beverages. Effective (oz), and 30-day 30-day soda consumption
estimation model; collection: Dec 6 to Trenton and January 1, 2017. total consumption frequency was 38% lower.
propensity score 31, 2016. Camden, NJ, frequency. Beverage Odds of bottled water
weights. Post-tax: Jan 15 to Wilmington, DE categories: SSBs consumption was 58% higher.
Feb 31, 2017. (regular soda, fruit No other consumption
and energy drinks); outcomes by beverage types
non-sugar sweetened were significant.
beverages (diet soda,
fruit and energy drinks);
bottled water.
Roberto, Pre-post Store scanner data Scanner data: Specific excise tax Volume sold in DID estimates: volume sold of
Lawman, intervention- obtained from 291 stores (54 of $0.015-per-oz on ounces. Beverages SSBs fell by:
LeVasseur, comparison IRI (Information supermarkets, 20 SSBs and non- classified as taxed • 58.7% in supermarkets
Mitra, Peterhans, site DID model. Resources, Inc.). mass merchandise sugar sweetened (SSBs and non-sugar • 40.4% in mass merchandise
Herring, Bleich, Analysis of Retail sales data stores, 217 beverages. Effective sweetened beverages) stores
2019 changes in border reported in 4-week pharmacies). January 1, 2017. and non-taxed. • 12.6% in pharmacies
area. periods from Jan 17,153 unique Beverages classified Descriptive: overall volume
1, 2014 to Dec 31, beverage UPC by size: individual vs of SSBs fell by 51.0% (offset
2017. Data at the (9,325 SSBs; family (>36oz). 24.4% by cross-border
UPC level. 1,781 non-sugar shopping) for a net reduction
sweetened of 38%.
beverages; 6,047 Implied price elasticity from
unsweetened). study is: −1.7
NS changes in volume sold of
non-taxed beverages.
Coary & Baskin, Pre-post Sales data from Sales data Specific excise tax Sales ($) of taxed and DID estimates of change in
2018 intervention- 4-week periods from 5 stores in of $0.015-per-oz on untaxed beverages. sales ($) of taxed beverages
comparison pre-tax in Nov 2015 Philadelphia and SSBs and non- found a statically significant
site DID model. and Feb 2016, and 4 stores outside sugar sweetened reduction of $131,295 (~48%);
Analysis of post-tax Nov 2016, of Philadelphia beverages. Effective NS change in non-taxed
changes in border and Feb 2017. within 5 miles. January 1, 2017. beverages.
area. High volume items
n=931 products.
date
Philadelphia, PA
Cawley, Frisvold, Pre-post 1. Cross-sectional 1. Store exit Specific excise tax 1. Volume of taxed and 1. DID estimates of changes in
Hill, Jones, 2019 intervention- data on purchases surveys: of $0.015-per-ounce untaxed beverages beverage purchases from stores:
comparison from store exit adults>18y with on SSBs and non- purchased. Sub- • fell 31 oz per shopping trip
site DID model. surveys based on at least one child sugar sweetened categories: soda and • no significant change in
Cross-sectional stratified store 2-17y in household. beverages. Effective water. purchases of untaxed
model of changes types from retailer n=600 in January 1, 2017. 2. i) 30-day frequency beverages
in purchases at list. Pre-tax: Nov to Philadelphia; n=705 of taxed and non-
2. Frequency of consumption:
stores controlled Dec, 2016; Post-tax comparison. taxed beverage
• adults: NS change for
for a vector Nov to Dec 2017. 2. Longitudinal consumption based
taxed beverage
of consumer n=241 Philadelphia; on the National
• adults: significant
and interview 2. Longitudinal n=199 comparison Health and Nutrition
reduction in soda
variables. follow-up survey Examination Survey
consumption frequency
Longitudinal from Dec 2016 store (NHANES) dietary
• children: NS change
model of exit survey. screener; ii) total
in frequency of taxed
consumption amount of added
beverage consumption or
estimates OLS sugar consumed from
by beverage category
of change in beverages based on
• adults and children: NS
consumption on NCI algorithm.
change in consumption
tax jurisdiction
frequency
controlling
for baseline 3. Sugar intake:
consumption • adults and children: NS
and individual change in sugar intake
characteristics. from beverages
• children: significant
reduction in beverage
sugar intake among
children who had high
pre-tax consumption of
added sugars
51
52
date
Philadelphia, PA
Zhong, Longitudinal pre- Random-digit-dial Adults: Specific excise tax 1-year changes in DID estimates found
Auchincloss, post DID linear and phone survey; n=357 from of $0.015-per-oz on 30-day consumption NS effects for 30-day
Lee, McKenna, logistic regression modified BEVQ-15 Philadelphia, SSBs and non- frequency; changes consumption frequency for
Langellier, 2020 estimation survey; pre-tax Dec PA; n=158 from sugar sweetened in 30-day total SSBs (−3.03 times), non-sugar
models. Analyses 2016 to Feb 2017; comparison sites: beverages. Effective consumption volume sweetened beverages (0.40)
adjusted for post-tax Dec 2017 Trenton and January 1, 2017. (oz). Beverage and bottled water (−15.79)
demographic and to Feb 2018. Camden, NJ, categories: SSBs and also NS changes in
SES characteristics Wilmington, DE. (regular soda, fruit and mean monthly ounces for
and health energy); non-sugar SSBs (−51.65), non-sugar
behaviors, sweetened beverages sweetened beverages (21.62)
conditions and (diet soda, fruit and and bottled water (−315.81).
status; week/ energy); bottled water.
month.
Seattle, WA
Powell & Leider, Pre-post Store scanner data Scanner data from Specific excise tax Volume sold in ounces. DID estimates:
2020 intervention- obtained from supermarkets and of $0.0175-per-oz SSBs classified as Volume sold of SSBs fell by
comparison Nielsen; 8-month mass merchandise, on SSBs with ≥ 40 taxed (soda, energy, 22%.
site DID model. pre-tax period (Feb grocery, calories per 12 fluid sports, juice and tea/ Volume sold of untaxed
Analysis of 2018 to Sept 2018) convenience, drug, ounces. Effective coffee drinks) and beverages increased by 4%.
changes in border and post-tax period and dollar stores. January 1, 2018. non-taxed (SSBs<40 NS changes in cross-border
area. (Feb 2019 to Sept 1,600 taxed and kcal/12 oz; 100% shopping.
2019). Data at the 2,203 untaxed juice, milk, water). Implied price elasticity from
UPC level. UPCs. Beverages classified study is: −1.1.
by size: individual (≤1
L) vs family (>1 L and
multipacks).
BEV-Q: beverage intake questionnaire OLS: ordinary least square

DID: difference-in-difference RE: random effects
DSQ: dietary screener questionnaire SES: socioeconomic status
FE: fixed effects UPC: universal product code
GLM: generalized linear model g: grams
HTHU: higher purchases of taxed beverages and higher purchases of untaxed beverages L: liters
HTLU: higher purchases of taxed beverages and lower purchases of untaxed beverages kcal: kilocalories
LTHU: lower purchases of taxed beverages and higher purchases of untaxed beverages oz: ounces
LTLU: lower purchases of taxed beverages and lower purchases of untaxed beverages
NS: non-statistically significant
53
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Sugar-sweetened beverage excise taxes are an effective evidence-based
noncommunicable diseases (NCD) prevention policy. Along with tobacco and alcohol
excise taxes, they are a tool to attain the Sustainable Development Goals, and are
recommended by the World Health Organization to modify behavioral risk factors
associated with obesity and NCDs, as featured in the WHO Global Action Plan. Taxes
on sugar-sweetened beverages have been described as a triple win for governments,
because they 1) improve population health, 2) generate revenue, and 3) have the
potential to reduce long-term associated healthcare costs and productivity losses.
Taxation of sugar-sweetened beverages has been implemented in more than 73

countries worldwide. In the Region of the Americas, 21 PAHO/WHO Member States
apply national-level excise taxes on sugar-sweetened beverages and seven jurisdictions
apply local sugar-sweetened beverage taxes in the United States of America. While the
number of countries applying national excise taxes on sugar-sweetened beverages in
the Region is promising, most of these taxes could be further leveraged to improve
their impact on sugar-sweetened beverages consumption and health.
This publication provides economic concepts related to the economic rationale for
using sugar-sweetened beverage taxes and the costs associated with obesity; key
considerations on tax design including tax types, bases, and rates; an overview of
potential tax revenue and earmarking; evidence on the extent to which these taxes
are expected to impact prices of taxed beverages, the demand for taxed beverages,
and substitution to untaxed beverages; and responses to frequent questions about the
economic impacts of sugar-sweetened beverage taxation.
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Sugar-sweetened

Washington, D.C., 2020

© Pan American Health Organization, 2020

ISBN: 978-92-75-12299-0 (Print)

Cataloguing-in-Publication (CIP) data. CIP data are available at http://iris.paho.org.

Taxation of sugar-sweetened beverages has been implemented in

This publication provides readers with economic concepts related to

Acronyms and abbreviations

There is growing evidence of the importance of taxes on SSBs as part of a

Actions has also initiated development of evidence-informed WHO guidance on fiscal

This technical reference is intended to provide assistance as follows: Section 1 presents

1.2 Economic costs of obesity

Figure 2: Overview of costs associated with obesity in children and adults

Summary: Costs of obesity

Childood obestity Adult obestity

• Poorer physical health Gender, race/ ethnicity, SES, region

Health and wellbeing disparities

2. Key elements for SSB tax design

Box 1: Example of advantages of specific versus ad valorem excise taxes

Additionally, in comparing specific versus ad valorem excise taxes, it is important to

Soda Juice Energy Sports Tea/ Overall

Average beverage price in 2.68 3.52 13.60 3.88 4.42 3.45

Example 1: Specific excise 1.00 1.00 1.00 1.00 1.00 1.00

Implied ad valorem excise

Example 2: 20% ad valorem

2.2 Tax base

SSB taxes can be designed with discrete tiers based on thresholds

2.3 Tax rate

Tax rates need to be sufficiently high to effectively disincentivize consumers from

2.4 Current SSB taxes in the Americas

Figure 4: Excise taxes on SSBs in the Region

Oakland CA: Guatemala: Amount-specific

3. Tax revenue and earmarking

Table 2: Example of SSB tax revenue calculation

Pre-tax volume sold (L) 3,650,000

Pre-tax price per L 55 CU

Effective tax rate 18.2%

% change in sales −21.8%

Reduction in volume sold (L) (795,700)

Post-tax volume sold (L) 2,854,300

Estimated tax revenue 28,543,000 CU

• Subsidizing drinking water infrastructure, including in schools;

4. Evidence on the impact

4.1 Impact on SSB prices

4.2 Impact on demand for SSBs

Box 2: Methods for meta-analysis of SSB tax impacts

Figure 5 presents results based on a meta-analysis of 23 estimated SSB tax effects on

4.3 Impact on substitution

Price elasticity of demand for SSBs

Barbados, Alvarado (2019) (72) -0.73 (-0.83, -0.61)

5. Frequent questions and

5.1 Distributional impact of SSB taxes

5.2 Cross-border shopping

5.3 Impact on employment

Box 3: No robust evidence that SSB taxes lead to job losses

SSB excise taxes are an effective evidence-based NCD prevention policy.

As expressed in this document, SSB excise taxes are likely to have a

Site Effective Type of Tax Applicability Beverage Revenue

Site Effective Type of Tax Applicability Beverage Revenue