Not So Sweet: Impacts of a Soda Tax on Producers

Judite Goncalves (), Roxanne Merenda and João Pereira dos Santos ()
Additional contact information
Judite Goncalves: Universidade Nova de Lisboa
Roxanne Merenda: Universidade Nova de Lisboa
João Pereira dos Santos: Queen Mary University of London

No 15968, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Portugal introduced a sugar-sweetened beverages (SSB) tax in 2017. This study uses unique administrative accounting data for all SSB producers/importers in Portugal, and an event study design with bottled water firms as the primary comparison group, to assess the causal impacts of the tax on multiple firm-level outcomes. We find a 6.8% average decrease in domestic SSB sales, vis-à-vis bottled water. The soda tax hindered SSB firms' financial health, namely net income, ability to convert receivables into cash, and liabilities. SSB producers/importers did not decrease wages, cut jobs, or modify their workforce towards higher R&D capacity. Forgone corporate income tax appears negligible compared to the government revenue generated by the tax itself.

Keywords: sin taxes; firm-level; soda tax; sugar tax (search for similar items in EconPapers)
JEL-codes: H25 H51 I18 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2023-02
New Economics Papers: this item is included in nep-hea, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published - published in: International Tax and Public Finance, 2024, 31, 1388–1412

Downloads: (external link)
https://docs.iza.org/dp15968.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp15968

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().