This review investigates why discriminatory excise taxes in more advanced economies, focusing particularly on the EU, do not work in modern tax systems. Some key insights from the review:
- “[…] the economic case for taxing soft drinks is weak. […] A middle or higher income country that resorts to a tax list of discriminatory excises on consumption of specified products is taking a step back in the development of their fiscal system and is postponing a more proper reform that would be in the better interest of the country”
- “The case for a discriminatory tax on soft drinks is very weak. At best the discriminatory taxation of soft drinks is part of a “stopgap” program, usually designed to solve a short-term revenue problem”
You can find the whole paper here.