Jurisdictions where cross-border shopping is convenient can also have the benefits of the tax reduced as some will buy sugary drinks from areas where they are not taxed. Some point to substitutes like fruit juice, energy-dense snacks and biscuits as ways a tax on processed sugar in drinks might be limited. Government revenues from these taxes sometimes are put towards improving public health services, however this is not always the case. Increased taxes on sweetened products have been suggested to promote companies to re-formulate their product in order to keep consumer costs affordable by decreasing use of the taxed ingredient (i.e., sugar) in their product. A design change such as this has been proposed to 'boost a SSB tax's health benefits and overall economic gains by roughly 30%.' Most taxes on sugar-sweetened beverages (SSBs) are set volumetrically (i.e., with a constant rate per unit volume), and that 'only three SSB taxes worldwide are proportional to sugar content.' The study argued that such volumetric taxes 'are poorly targeted to the actual health harms from SSBs,' and suggested taxing the amount of sugar in beverages, rather than the volume of liquid accompanying the sugar. For this reason, a large (bulk) item would have less tax compared to a smaller cheaper item (i.e., there is less tax impact on larger packages of a food item).

The amount of both VAT and sales tax are directly proportional to the amount of money paid for an item and do not consider the volume of food or drink. VAT (value added tax) is the most common type of tax and is also added on at the time of purchase, at an amount that is dependent on the value paid for the item. Sales tax (indirect tax) is paid by the person consuming the item at the time of purchase and collected by the government from the seller. Indirect taxes include import/export taxes on sugar or other ingredients before it has been processed and local/regional/international taxes. Tax design approaches include direct taxes on the product and indirect taxes. Advocates such as national medical associations and the World Health Organization promote the tax as an example of Pigovian taxation, aimed to discourage unhealthy diets and offset the growing economic costs of obesity. The tax is a matter of public debate in many countries and beverage producers like Coca-Cola often oppose it. This policy intervention is an effort to decrease obesity and the health impacts related to being overweight. Drinks covered under a soda tax often include carbonated soft drinks, sports drinks and energy drinks. Soda pop taxes are used in some jurisdictions to decrease consumption.Ī sugary drink tax, soda tax, or sweetened beverage tax ( SBT) is a tax or surcharge (food-related fiscal policy) designed to reduce consumption of sweetened beverages.

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