How Sweet It Is – Chile Tax Authority Blamed for Price Rise on Sweetened Beverages

As of 31 May, Chile’s largest beverage company, CCU, will increase consumer prices on nectars, hypotonic and isotonic drinks, by 9%, to absorb a change in the calculation of value-added tax on non-alcoholic drinks. The change was announced in April by the Servicio de Impuestos Internos (SII), Chile’s tax authority.

But what is the reality behind sugary drinks taxation? The obvious incentive for government officials is not so much revenue related as it is to get people to purchase healthier beverages instead of sugary ones. And since the first Coca-Cola was poured in 1886, access to soft drinks worldwide is now ubiquitous.

People who consume one to two cans of sugary drinks daily have a 26% higher chance of developing type 2 diabetes than people who rarely consume them. Obesity has more than tripled worldwide since 1975 and global losses in gross domestic product due to diabetes, including direct and indirect costs, are expected to reach the $2 trillion mark!