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UK publishes draft legislation on sugar tax

DBR Staff Writer Published 06 December 2016

The UK government has published draft legislation for a tax on sugar-sweetened drinks, intended at tackling child obesity.

Announced in March this year, the levy is to be implemented from April 2018, giving time for beverage companies including soft drink companies like Coca Cola and Britvic to reformulate their drinks with lessened sugar content.

The tax has been proposed to come in two bands, one on drinks that have more than 5gms of sugar per 100ml while the other will be on soft drinks with more than 8gms of sugar content per litre.

While the rates for these are yet to be finalized, the Office for Budget Responsibility had estimated that the levy could be between 18 and 24 pence.

From the two-threshold sugar tax implementation, the UK government is expecting to collect £520m in the year of its introduction.

HM Treasury Financial Secretary Jane Ellison said: “The government has always been clear that this is a levy we would rather not collect – but one which is necessary to help drive down sugar consumption and tackle childhood obesity.

“Across England the government will invest the revenue during this parliament in giving school-aged children a better and healthier future, including programmes to reduce obesity and encourage physical activity and balanced diets. The devolved administrations will receive funding through the Barnett formula in the usual way.”

Published by the HM Revenue & Customs, the draft guidelines will be taken up by the government when it introduces its finance bill for next year.

The UK government said that the sugar tax would make beverage companies to reformulate their soft drinks by cutting down the sugar quantities.

It noted that the proposed tax has already made several important companies to make changes, including recipe changes and also promotion of lower sugar drinks.

Britain now joins other countries like Belgium, Hungary, Mexico and France in enforcing sugar tax.

Image: Sodas and soft drinks at a Supermarket. Photo: courtesy of Marlith and Commons.Wikimedia.org.