EFFECTS OF SWEETENED BEVERAGE TAX BASED ON SUGAR CONTENT IN BEVERAGES

Abstract

This study aims to examine the effects of sweetening tax based on sugar content in Beverages. It focuses on the third phase adjustment of the excise tax rates. Data was collected in two periods: before and after the excise tax adjustment using a beverage price index. The analysis employed the Difference in Difference (DID) method. The study found that overall, beverages subject to the sugar tax saw an average price increase of 7.82%, statistically significant at the 0.05 level. Specifically, beverages with sugar content above 14 grams saw the highest price increase, followed by those with 10-14 grams, 6-8 grams, and 8-10 grams of sugar respectively. Importantly, the study indicates that the tax burden was largely shifted to consumers, exceeding 100% in some sugar content categories. Thus, taxing based on sugar content allows manufacturers to pass on the tax burden to consumers, known as forward tax shifting. This taxation strategy aims to manage beverages with excessive sugar levels that could pose health risks to the public.