Experts are advocating for a focus on enhancing nutritional labeling and health education rather than imposing a sugar burden tax on sugary beverages. They warn that introducing such a tax could disproportionately impact low-income individuals and young people, especially as consumption of sugary drinks is already declining.
On September 7, the Korean Tax Policy Association and the Korean Taxpayers Alliance co-hosted the 34th Tax Policy Seminar titled, 'What Should We Consider in Introducing a Sugar Burden Tax on Sugary Beverages?' The seminar aimed to comprehensively assess the recently proposed sugar burden tax from the perspectives of health effects, burden distribution, and fiscal structure.
During the seminar, Professor Noh Jeong-ran of Myongji University presented findings from a nine-year empirical analysis of the National Health and Nutrition Survey (2016-2024) and simulations on burden distribution. The analysis revealed that even without a tax, the average daily consumption of sugary beverages per person decreased from 116.9 grams in 2016 to 87.0 grams in 2024, a 25.6% reduction. This indicates a market-driven reduction in sugar intake, including the rise of zero-calorie drinks.
Professor Noh also noted that the introduction of a sugar burden tax could place a heavier burden on low-income households. The analysis showed that the tax burden ratio for the lowest income group (20th percentile) was approximately 8.4 times higher than that of the highest income group (80th percentile). When considering both age and income, the burden appears to be concentrated among low-income youth and adolescents.
Concerns were raised about the potential use of tax revenue for the National Health Promotion Fund. If sugary beverage consumption decreases and the policy goal of health improvement is achieved, the revenue from the tax would also decline. Conversely, a contradiction arises if the tax revenue needs to be maintained while sugary beverage consumption significantly decreases.
Professor Noh stated, 'Given that reductions in sugar intake are already occurring due to market changes such as the spread of zero-calorie and low-sugar products, there is less need to prioritize uniform price regulations. Instead, we should first implement non-price policies that enhance nutritional labeling, target health education for youth, and encourage voluntary sugar reduction by companies.'
During the expert discussion, participants emphasized the need to carefully evaluate the effects and side effects of introducing a sugar burden tax rather than rushing into its implementation.
Professor Ha Sang-do of Chung-Ang University pointed out, 'Sugar intake in Korea is decreasing, and obesity has multiple contributing factors, including lack of physical activity. We need to thoroughly verify whether introducing taxes or burdens actually leads to a reduction in overall caloric intake and whether there are any unintended consequences.'
Professor Nam Hye-jeong of Dongguk University highlighted the potential for a 'balloon effect,' where consumers might switch to other beverages if sugary drink prices rise. She argued for an analysis of how much the tax is reflected in actual product prices and its health improvement effects.
Professor Oh Mun-seong of Kyung Hee University noted, 'The relationship between raising prices and actual health improvements has not been sufficiently proven, and the burden may fall more heavily on low-income and youth populations. We should carefully consider whether the burden tax approach is appropriate rather than rushing to implement it just because it is being done abroad.'
Professor Hong Gi-yong of Incheon University emphasized the need to prioritize policies that enhance consumer information, such as nutritional labeling, and to promote market-friendly policies that incentivize companies to voluntarily expand zero and low-sugar products.
Kim Gap-soon, president of the Korean Tax Policy Association, stated, 'Since there are already voluntary efforts in the market to reduce sugar intake, we should prioritize non-price and market-friendly approaches over price controls.'
* This article has been translated by AI.
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