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by Ian Gorman, MBA, FCMI | June 22, 2018

Let’s talk about the United Kingdom’s newest and possibly most politically correct tax to date – The Sugar Tax, officially called the “Soft Drinks Industry Levy”. Introduced on April 6th, 2018, this tax specifically targets consumers of soft, fizzy drinks that contain what some “experts” have arbitrarily determined to be too much sugar.

DETAILS OF THE TAX

There are 2 categories of tax:

The first applies to drinks with more than 5g but less than 8g of sugar per 100ml, at 18p per litre.
The second applies to drinks with 8g or more of sugar per 100ml, at 24p per litre.

The tax does not apply to pure fruit drinks, milk-based drinks and some small producers who are exempted.

DISCUSSION

Per the most recent Treasury Budget projections, this tax will raise around £300 million per year in each of the coming three fiscal years. Given that the tax is based on the amount of fizzy soft drinks consumed, these budget projections suggest that the government does not expect the tax will actually reduce the consumption of fizzy drinks at all. Therefore any claim that the public is being taxed to encourage a change in behaviour away from consumption of these “harmful” products is exposed as nothing more than social engineering propaganda.

The government claims that these new tax revenues will be targeted to provide primary schools sports facilities and equipment. One has to wonder why these sports facilities and equipments were not already being provided from the education budget. I am sure that I am not alone in remembering that children in primary schools used to be very physically active, playing outside for an hour each day at school, plus weekly PE and Games lessons. Given our successive governments’ inability to spend taxes for the purposes they are purportedly raised (example: road tax to pay for roads) don’t expect to see brand new multi-gyms in your local primary school anytime soon.

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OPINION

This is clearly a classic example of a nanny-state, patronising and regressive tax. It is a clear case once again of the State telling you, the Sovereign people of the United Kingdom, what is good for you. According to the State you are not smart enough to educate yourself and make your own decisions on the foods and drinks that you and your children consume. It is our responsibility, each and every one of us, to determine what is best for our own health and that of our children, not the State! Never the State!

The Sugar Tax is regressive as it negatively impacts poorer families the most, as they spend the highest proportion of their limited incomes on food and drinks. So we have a new tax on the poor to assuage the guilt that our country’s mislead, politically correct elite feel towards their own unhealthy lifestyles.

I truly believe that the hurdle required to justify the introduction of a New Tax must be set very high and the Sugar Tax has not only failed to clear any such hurdle – it has tripped on the moral slip map placed at the starting line for being patronising and regressive.

ADDITIONAL OBSERVATIONS

In practice we have already seen cases where not only have the shelf prices of full-sugar Coke and Pepsi increased due to this new tax but some retailers have also increased the price of other Coke and Pepsi products not impacted by the new tax. As the tax is collected where the product is manufactured the retailer is paying more for the full-sugar Coke than for example Diet Coke, but some retailers are charging customers the same higher new price for regular Coke and Diet Coke.

Let us be clear, we are talking about sugar a naturally occurring substance, not a synthetic substance cooked up in a laboratory. There are numerous studies that relate overconsumption of sugars and other carbohydrates together with excessive calorie consumption in general, with the development of health issues in combination with the increased trend towards more sedentary lifestyles. However, there are also concerns in some circles about the increased usage of artificial sweeteners which are now being added to many “non-diet” fizzy drinks to offset the reduced levels of sugar encouraged by this new tax.

Let us also keep in mind those citizens who have allergies to these artificial sweeteners, who now have a very limited choice of fizzy drinks to choose from.
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