Essay
IB Microeconomics IA
- Module
- Economics
- Institution
- Oxford University (OX)
Officially graded 13/14, IB Economics HL IA
[Show more]
Seller
Follow
Content preview
British Columbia adds tax to soda and sugary drinksBy Rachel Artur | 19-feb-2020
Carbonated beverages sweetened with sugar, natural or artificial sweeteners will be taxed in British
Columbia under the Provincial Sales Tax Act as of July this year.
The western Canadian province had previously granted carbonated beverages an exemption to the
Provincial Sales Tax Act, deeming it a ‘food product for human consumption’. As of July 1, however,
carbonated beverages sweetened with sugar – but also those using artificial sweeteners or even natural
sweeteners – will now be subject to the 7% tax.
For administrative ease, provincial sales tax will also apply to all beverages that are dispensed through
soda fountains, soda guns or similar equipment, as well as beverages dispensed through vending
machines (except those dedicated solely to coffee or water or similar).
The tax on carbonated beverages was announced in British Columbia’s Budget 2020 this week. “BC will
begin charging PST on sweetened carbonated drinks to help address the health and economic costs of
these beverages,” said Finance Minister Carole James.
“Research shows that teens between the ages of 14 and 18 are the top consumers of pop. This is a step
that health professionals and an all-party committee have long supported. “Because this is about
keeping young people healthy while taking in a bit of revenue to continue to pay for enhanced health
care services for everyone.”
The measure is expected to make $27m ($20m USD) in its first year and $37m ($28m USD) in 2021-2022
Source: Beverage Daily
COMMENTARY:
This commentary will cover the concepts of negative consumption externalities (NCE) and taxes,
applied to the scenario where British Columbia’s (BC) government imposed a 7% tax on Sugary
Drinks.
Sugary drinks are demerit goods because they have negative effects on people’s health,
therefore, are socially undesirable. The market for sugary drinks in BC is an example of a market
failure. In this case, it’s in the form of a NCE because the consumption of sugary drinks imposes
external costs on society as it leads to addiction, diabetes and obesity which mean higher costs
imposed on national healthcare and a loss of work productivity.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller saettonemauricio. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for £9.29. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
77254 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy revision notes and other study material for 14 years now