Taxes on Sugary Drinks in Argentina: Challenges for Legislation and Implementation

Abstract

Weight gain and obesity constitute two of the main public health problems in the world. There is broad consensus that the habitual intake of sugar-sweetened beverages is two of the main determinants of overweight and obesity. One of the actions implemented to address this public health problem is the application of taxes on sugar-sweetened beverages. Taxes, in addition to financing the State, affect the relative prices of goods and services and are a useful tool to discourage the consumption of goods that affect the health of the population. The effectiveness of this instrument depends on the translation of the tax to the price and the elasticity of demand, which determines the effective reduction in the quantity consumed. The use of this type of instrument requires legislative approval, and the action of interest groups in these institutional instances adds an additional difficulty for their implementation. The objective of this paper is to analyze the implementation of a consumption tax on sugar-sweetened beverages in Argentina in order to reduce their consumption and mitigate their negative effects on population health. To achieve this, a theoretical review of contributions regarding tax incidence and interest groups action was carried out. Additionally, a search for empirical studies that evaluate the effects of the implementation of this type of tax was carried out. Finally, the session records of the Honorable Chamber of Deputies of Argentina were consulted, analyzing the opinions and arguments of legislators during the debate on tax reform that would impact the interests of the Argentine sugar-producing sector if modifications to the sugary beverage tax were approved.