Taxing Soft Drinks

Roy Bahl ()

International Center for Public Policy Working Paper Series, at AYSPS, GSU from International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University

Abstract: This paper reviews the practice of levying an excise tax on soft drinks in sub-saharan African countries, and evaluates this practice against theoretical norms for levying an excise tax. The question is whether such taxes are justified or whether they are discriminatory and impose a welfare cost on the country. The paper concludes that the sin tax justification does not hold for soft drinks, nor do income distribution justifications. Arguably the best reason for such a levy is revenue, but this argument is weakened by a higher price elasticity of demand than usually supposed.

Pages: 33 pages
Date: 2011-04-08
New Economics Papers: this item is included in nep-pub
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Persistent link: https://EconPapers.repec.org/RePEc:ays:ispwps:paper1106

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