A partial amendment to the National Health Promotion Act was proposed on February 26, 2021 to expand the applicable scope of “national health promotion charge”1 (the “Charge”) to those that manufacture, process, import, distribute and sell sweetened beverages. The Charge is currently levied only on tobacco products.
The proposed amendment sets forth (i) the requirement to levy Charges on beverages sold by businesses that manufacture, process and import sweetened beverages and (ii) the standards for imposing the requirement, with a view to inducing the public to improve their dietary habits and thereby preventing diabetes, obesity, high blood pressure and other related diseases and enhancing public health.
The World Health Organization recommended the introduction of sugar tax in 2016, stressing the need to formulate tax and finance policies with the aim of reducing sugar intake and encouraging healthy food consumption, and sugar tax has already been adopted by a fairly large number of countries including the United States (certain localities), the United Kingdom, France, Italy, Norway, Thailand and the Philippines.
Key Aspects of the Proposed Amendment
Under the proposed amendment, the duty to pay sugar tax will be imposed on manufacturers, processors, importers, distributors and sellers of sweetened beverages, and different rates of sugar tax will apply based on sugar content (i.e., higher rates will apply to beverages containing more sugar).
| Sugar Content (kg per 100ℓ) |
Charge (KRW per 100ℓ) |
Sugar Content (kg per 100ℓ) |
Charge (KRW per 100ℓ) |
Sugar Content (kg per 100ℓ) |
Charge (KRW per 100ℓ) |
| 1 or less | 1,000 | More than 5 but not more than 7 | 5,500 | More than 13 but not more than 16 | 15,000 |
| More than 1 but not more than 3 | 2,000 | More than 7 but not more than 10 | 8,000 | More than 16 but not more than 20 | 20,000 |
| More than 3 but not more than 5 | 3,500 | More than 10 but not more than 13 | 11,000 | More than 20 | 28,000 |
The sugar content of sweetened beverages intended to be consumed after diluting or mixing will be calculated based on the preparation directions suggested by the manufacturer. Beverages that are labeled “No Sugar Added” or “No Added Sugar”2 pursuant to the Labeling Standards for Foods, etc. (“Labeling Standards”) will not be subject to the Charge.
2 Beverages that do not contain sugar, functional substitutes for sugar (e.g., honey, sugar syrups and oligosaccharide), sugar-added ingredients (e.g., jam, jelly and fruit sweeteners) or sugar-containing ingredients (e.g., concentrated fruit juice) and beverages whose sugar content was not raised through processes such as enzymatic hydrolysis (for your reference, regulations on “No Sugar Added” and “No Added Sugar” claims will be newly incorporated in the Labeling Standards within the first half of this year).
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