Calculating Standardized Tax Share and Other Price and Tax Policy Indicators for Sugar-Sweetened Beverages in Latin America and the Caribbean: Methodological Note

ABSTRACT

The WHO Global Action Plan for the Prevention and Control of Noncommunicable Diseases 2013–2020 (WHO Global Action Plan) recognizes the critical importance of reducing the level of exposure of individuals and populations to common risk factors of noncommunicable diseases (NCDs), including unhealthy diet. It particularly recommends taxing sugar-sweetened beverages (SSBs) as one cost-effective regulatory policy to prevent NCDs. Indeed, SSB consumption is associated with weight gain in children and adults, increased incidence of type 2 diabetes, cardiovascular disease, dental caries, and osteoporosis. Taxes on SSBs are increasingly applied across Latin America and the Caribbean and represent a triple win for governments, because they 1) improve population health, 2) generate revenue, and 3) have the potential to reduce long-term associated healthcare costs and productivity losses. While WHO monitors tobacco taxes and prices with standardized quantitative indicators, including the comparison of tobacco tax share levels across all Member States and time, since 2008, comparable information on taxation of SSBs over time and across countries is not currently available. Such monitoring is important for analyzing trends, enabling standardized comparisons across countries, establishing best practices, and providing a powerful tool for advocacy. The Pan American Health Organization (PAHO) is committed to providing Member States with accurate, relevant, and internationally comparable information that they can use to guide the development of policy and to evaluate the impact of measures to prevent overweight and obesity. This note describes the methodology that PAHO developed for estimating a tax share indicator and other tax policy and price indicators for selected non-alcoholic beverages, based on the methodology used by WHO to monitor prices and taxes applied on tobacco products since 2008. It outlines the definition of the scope and beverages for which the tax share is calculated; a description of the data collection and analysis process; and an explanation of key components of the tax share calculation. It also defines additional indicators on prices, affordability, and tax policies.