To encourage a decrease in the sugar content of beverages in response to public health concerns, the Excise Department under the Ministry of Finance of Thailand implemented a sugar tax to producers. The market intervention aims to decrease the negative externalities caused by the over consumption of sugar, specifically within the beverage industry, and therefore improve efficiency, specifically allocative efficiency (where the factors of production within the economy are distributed in a way that best satisfies the wants and needs of society). This commentary will discuss how the indirect tax will help decrease the negative externalities of sugar consumption.
