Sugar tax 

Is a tax on sugar sweetened drinks. This came into effect in 2018. eg. in 2021 it was 20c on 5-8g of sugar per 100ml. 

Watch the videos below: 


  1. Is sugar tax a progressive or regressive tax?
  2. Explain how the introduction of a sugar tax is being used to overcome a negative externality? Brainstorm five economic implications of the sugar tax
  3. Debate whether the tax should be increased or decreased? 
  4. Consider whether tax should be extended to other food items. 

UK ‘considering scrapping soft drinks sugar tax’

Advantages of sugar tax

 1.Revenue for state 

This tax would bring in much needed revenue for the government that could help fund health initiatives.  

It could be programmes which tackle obesity particularly among young people.

 2. Reduce consumption of sugary foods 

The tax would increase the price of these foods and this may act as a disincentive to purchasing these foods. As price goes up, the retailer could pass the burden of the tax on to consumers, as price goes up, quantity demanded falls. 

 2. Help reduce future health costs / healthier population 

By helping to reduce current consumption there may be less health problems in the future leading to less expenditure on health. Reduced illnesses in the population will help to reduce current health costs. 

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