The Debate on the Sugar Tax: Is it just a Government Cash Grab?

One of the main causes of chronic diseases like diabetes and obesity is sugar. A sugar levy could lower total health care costs while assisting people in avoiding certain illnesses. Excessive sugar consumption has also been connected in recent research to dementia and depression. The need to safeguard older individuals' mental health and prevent dementia has grown as Korea transitions to a super-aged society.

The WHO has recommended increasing taxes on sugary drinks by at least 20% to help reduce consumption, and several countries such as the UK and Korea have already implemented sugar taxes. It recently expanded to include milk-based products in an effort to lower sugar consumption in the UK. Drinks sold over-the-counter at cafes and coffee shops are exempt from the tax, although goods in cans, cartons, and other packaging are subject to being taxed.

Meal replacement drinks, beer and wine without alcohol, and fruit juices were exempt from the fee. Because milk-based beverages include calcium, they were once exempt. Now, following the health secretary's announcement that he was expanding the tax on fizzy drinks to include plant-based milk products, pre-packaged milkshakes, flavored yogurts, and sugar-rich coffees will be subject to an additional tax starting in 2028. However, to account for the naturally occurring sugars in milk, there will be a "lactose allowance" as well. This means that when calculating their tax burden, a portion of the sweetness in milk-based beverages will not be included in the total amount of sugar. 

The National Assembly of Korea has been debating a sugar tax, with appeals for social consensus on the tax as a moral obligation to address the harm that sugar intake causes to one's health. With President Lee Jae Myung suggesting a new tax akin to tobacco levies. The goal of this plan is to reduce sugar intake and use the money raised to improve public health care systems. Reactions to the plan have been divided; some are in favor of it as a public health measure, while others are worried about how it will affect inflation and food prices.

Many also believe that the levy is a mere money grab rather than a measure purely for the public's health. However, since collection would decrease if sugar consumption decreased, the levy is not intended to be a new source of income. The policy would be more successful the closer tax revenue gets to zero. Targeting necessities with inelastic demand rather than luxuries would be the most sustainable strategy if the government's sole objective were to increase tax revenue. 

If producers absorb the expense of the tax or reduce the amount of sugar in their products, the expansion of the tax might not result in an increase in the store shelf price of milkshakes and milky coffees. While some continue offer the higher-sugar version alongside the new one, many manufacturers of carbonated drinks have altered their formulations to evade the levy. According to the UK government, their initial sugar tax in 2018, reduced the amount of sugar in carbonated drinks by 46%, which helped adults and kids eat healthier. 

As plant-based dairy substitutes and carbonated energy drinks continue to gain popularity among Gen Z and Gen Alpha, the sugar tax has the potential to significantly improve consumers' long-term health and well-being and is something more and more nations across the world should consider. 

Bibliography

Milkshakes and lattes to face sugar tax in UK

‘Sugar tax' stirs up debate over public health, inflation - The Korea Times

Is a sugar tax good public health care policy or just a government cash grab?

Milkshakes and lattes to face sugar tax in UK