SDG 3: Good Health and Well-being | SDG 17: Partnerships for the Goals
Ministry of Health and Family Welfare | Ministry of Finance
The World Health Organization (WHO) has released its 2025 Global Report on the Use of Sugar-Sweetened Beverage (SSB) Taxes, providing a 2024 assessment of fiscal policies applied to sugary drinks. While at least 116 countries apply national-level excise taxes to SSBs, the report reveals these taxes are not currently being used to their fullest potential to reduce sugar intake and prevent non-communicable diseases (NCDs) like obesity and type 2 diabetes.
Global Implementation and Policy Gaps
Beverage Coverage: While 114 countries tax carbonated beverages, most exclude other high-sugar products like 100% fruit juices, ready-to-drink tea/coffee, and milk-based drinks.
Healthy Substitutes: Approximately half of the countries taxing non-alcoholic beverages also tax unsweetened bottled water, which contradicts public health goals to incentivize healthy alternatives.
VAT Coherence: Only 1% of countries apply a higher-than-standard VAT rate on SSBs, while 12% apply a lower VAT rate, effectively subsidizing health-harming products.
Tax Design and Economic Erosion
System Types: Ad valorem and volume-specific taxes are most common, but only 8 countries utilize sugar-content-based specific taxes, which are more effective at encouraging product reformulation.
Inflation Risks: Less than 14% of countries mandate automatic adjustments for inflation by law. Without such provisions, the real value of these taxes erodes over time, making SSBs more affordable.
Low Tax Burden: The global median excise tax share for an internationally comparable brand is just 2.4% of the retail price.
What is ‘Industry Reformulation’ and how does tax design drive it? It refers to the process where manufacturers change the ingredients in their products to reduce harmful components like free sugars. Taxation acts as a catalyst for this when designed as a sugar-content-based specific excise or a tiered system based on sugar concentration. By imposing higher taxes on beverages with higher sugar density, the policy creates a financial incentive for companies to lower the sugar content in their overall portfolio to move into lower tax brackets, thereby reducing population-level sugar consumption without necessarily increasing prices for all consumers.
Policy Relevance
Strengthening SSB taxation is a critical “triple win” for India—improving public health, reducing long-term healthcare costs, and generating revenue for development.
Strategic Impact for India:
Addressing Rising Affordability: With SSBs becoming more affordable in low- and middle-income countries, India can utilize automatic indexation to prevent income growth from neutralizing the deterrent effect of taxes.
Promoting Healthier Alternatives: India should ensure that tax policies exclude unsweetened bottled water to encourage the consumption of healthy substitutes over sugary drinks.
Reformulation Incentives: Adopting a tiered sugar-content-based tax would encourage Indian beverage manufacturers to lower sugar levels, aligning with the “3 by 35” Initiative to increase the real price of health-harming products.
Funding Public Health: Earmarking SSB revenue could support India’s National Programme for Prevention and Control of NCDs or expand Universal Health Coverage, as seen in 10 other surveyed countries.
Follow the full report here: Global report on the use of sugar-sweetened beverage taxes 2025