UK government raises US$197m from sugar tax since introduction in April

UK – The UK government has collected about US$197 million (£153.8 million, €174 million) in revenue from the sugar tax since its introduction in April this year, a BBC report reveals citing statistics by Her Majesty’s Revenue and Customs (HMRC).

The Soft Drinks Industry Levy (SDIL) was introduced to address childhood obesity and encourage manufacturers and traders of soft drinks in the UK to reduce the sugar content of drinks products.

The levy is used to fund physical education activities in primary schools and also works to facilitate sports and healthier eating in schools across the UK.

“Today’s figures show the positive impact the soft drinks levy is having by raising millions of pounds for sports facilities and healthier eating in schools, as well as encouraging manufacturers to cut the sugar in more than half the drinks found in UK stores.

“Helping our next generation to have a healthy and active childhood is a priority for us, and I’m pleased to see the industry is playing its part,” said Exchequer Secretary to the Treasury Robert Jenrick.

Before its implementation, manufacturers were informed of the implications of the levy, making some of them carry out product reformulations in line with the new regulations.

While many manufacturers reduced sugar levels in their drinks products, more than 450 traders chose to pay the levy.

The levy statistics, which covers a period of seven months to end October indicates that 660 million liters of added sugar beverages have been taxed and of this, 601 million liters were subject to the higher rate; compared to 59 million litres for the lower rate.

According to the government, UK has one of the highest obesity rates among developed countries and soft drinks are still the biggest source of sugar in children’s diets.

Tax coverage

The levy has two tiers: a lower rate for beverages containing 5g sugar per 100ml or more; and a higher rate for those with 8g sugar or more.

It only covers soft drinks that is, non-alcoholic beverages (i.e. under 1.2% ABV) with added sugar.

A drink is considered to contain ‘added sugar’ if sugar has been added at any stage during production- this includes pure cane sugars such as sucrose and glucose as well as substances that contain sugar such as honey.

The levy applies to packaged beverages and excludes milk based drinks (with at least 75% milk); 100% fruit juice; alcohol replacement drinks (i.e. de-alcoholised beer and wine), drinks with less than 5g sugar per 100ml, and those from small producers.

HMRC data shows majority of the revenue, more than 90% has come from traders paying the higher rate.

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