New Prime Minister Liz Truss has reportedly put plans in place to scrap the sugar tax. She is experiencing difficulties scrapping it due to a growing backlash against her plans. Experts in the health field have labeled it as dangerous and counter-productive with the battle against obesity.
Here we look at what the sugar tax is and reasons for and against scrapping it.
What Is The Sugar Tax?
The Sugar Tax was implemented in April 2018 and is part of the Finance Act 2017. The tax is also known as the Soft Drink Industry Levy. It is a tax on sugar-sweetened drinks that are sold in the United Kingdom. The sugar tax is part of an overall health initiative by the UK Government. It is aimed at tackling increasing rates of obesity and Type 2 Diabetes across the UK. The Public Health of England included it as part of a wider campaign to also combat the increase in childhood obesity.
It is estimated the tax generates around £300 million a year in extra taxes. From a health benefit, over 50% of Soft Drink manufacturers have reduced the sugar content of drinks. It has led to a 30% cut in the sugar content of many drinks.
5 Key Things To Know About The Sugar Tax
1- There Are Two Bands In The Sugar Tax
If a drink has between 5-8 grams of total sugar content in 100ml, it will be taxed 18 pence per litre. The higher band of over 8 grams per 100ml will be subject to a tax equivalent rate of 24 pence per litre.
These relate to the drink in either its diluted form, or ready-to-drink. It is any drink with added sugar that is not included within any exclusions.
2 – What Is Added Sugar?
Added sugar isn’t just specific to sugar by itself. It is anything that can be added to a drink to give it a sweetened taste. It is any monosaccharides and dissaccharides. This includes sucrose, fructose, glucose, traditional sugars, sugars from honey and syrup and sugars from vegetable juices and unsweetened fruits
It doesn’t include sugars that may occur naturally in milk products, in grains, some seeds and certain processed fruits. Furthermore fake sugars, such as stevia, aren’t included.
3 – Small Producers of Less Than 1 Million Litres Are Excluded
The tax is targeting the soft drinks in general, not smaller producers. Companies who produced less than 1 million litres of soft drinks a year are exempt.
4 – Alcohol Is Excluded
Any drink with an alcohol content of more than 1.2% is excluded. This is categorised in Alcohol By Volume, or ABV levels. Anything above 1.2% ABV is considered an alcoholic drink.
5 – How Did The Industry Respond To The Tax
Some companies carried on as per normal and took a hit on the increased taxes. Other companies however reacted in a positive way. Coca-Cola has spent millions of pounds adding new recipes such as Coca-Cola Zero. On their main product, rather than change the recipe they reduced the size of their bottles and increased the price to factor the tax in.
Other companies proactively reduced the sugar content to fall in line so as to to incur extra taxes.
What Is Liz Truss Proposing?
It is still unclear how Truss would propose to scrap the tax. She is a known critic of using government intervention to promote healthier lifestyles, and does not want to tell people what to eat. Furthermore, she has stated to tax on treats will hit people with the lowest income. This is particularly pertinent with the cost of living crisis we are experiencing and the impact on lower-income families.
Key figures in Government have raised concerns about how Truss can overcome the obstacles of expected legal and parliamentary challenges to scrap the tax. We wait to hear what the Prime Minister’s next steps are. Health critics have been on record to say it would be disastrous to public health if the Sugar Tax was scrapped.
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