The Government has retreated from its original plan to tax sugary drinks by volume, opting instead for a revised framework based on sugar content following concerns raised by industry stakeholders.

Closing the 2026/27 Budget Debate in the House of Representatives on Tuesday, Finance Minister Fayval Williams announced changes to the proposed special consumption tax (SCT) on non-alcoholic sweetened beverages, signalling an adjustment which she said is aimed at making the measure more targeted and better aligned with the Government’s public health objectives.

The tax was originally announced in February as a flat rate of two cents per millilitre of beverage, a structure Williams said was chosen for its simplicity in administration and ease of enforcement. However, that approach quickly drew concern from beverage manufacturers and importers, who argued that it failed to distinguish between drinks with varying sugar levels.

Williams said the Government took those concerns into account, noting that consultations with stakeholders led to a reassessment of how the tax should be applied.

Under the revised framework, the tax will no longer be applied based on the volume of the drink, but instead on the amount of added sugar it contains. The new rate has been set at $0.22 per gram of added sugar, introducing a tiered effect under which products with higher sugar content attract higher taxes.

“The logic of this design is simple and principled. It is the sugar that causes the harm, so it is the sugar that should be taxed. A beverage with no added sugar will attract no SCT. A beverage with modest added sugar will attract a modest SCT. A beverage with higher sugar content will attract a higher SCT directly and proportionally. This is entirely consistent with how the SCT on alcohol is levied based on litres of pure alcohol,” Williams explained.

She emphasised that the change reflects the original intent of the policy, which she said was never primarily about revenue generation, but about addressing the country’s growing public health challenges.

“The SCT on non-alcoholic sweetened beverages was conceived from the very beginning as a health measure. Its purpose is to address the burden of non-communicable diseases — diabetes, obesity, hypertension — that bear down so heavily on our people and on our public health system,” she said.

Williams acknowledged that while the initial volume-based design was straightforward, it did not sufficiently account for the varying levels of sugar across different beverages.

“The original announcement of a rate of two cents per millilitre was made for reasons of administrative simplicity. A volumetric tax is straightforward to calculate, to collect, and to verify. However, stakeholders pointed out, and we agreed, that a flat volume-based tax does not vary by sugar content, and therefore does not distinguish between a low-sugar and a high-sugar product,” she noted.

She added that the structure is designed to encourage manufacturers and importers to cut the sugar content in their products, with lower sugar levels attracting lower tax.

The implementation timeline has also been adjusted to allow industry players and regulators time to prepare for the change. The tax, which was originally scheduled to take effect on April 1, will now be introduced on May 1, 2026.

Williams said the Government will continue to engage stakeholders as the measure is rolled out, acknowledging that practical issues may arise during implementation.

At the same time, she made it clear that the Government is not seeking to undermine the beverage industry.

“To manufacturers and importers, the message is straightforward: Reduce the sugar in your products and the tax burden falls. The Government is not seeking to harm a sector that employs thousands of Jamaicans. We’re changing the incentive structure, and we believe the industry is fully capable of responding to it,” she said.

Williams also used the opportunity to urge Jamaicans to view the measure not only as a fiscal policy, but as part of a broader effort to improve national health outcomes.

“To the Jamaican public, I ask you to consider that there’s hardly a family in this country that has not been touched by diabetes, hypertension, or obesity. These are not distant statistics, they are our parents, our children, our siblings, our neighbours. Every lower-sugar product on our shelves is a step in the right direction. Every informed choice at the shop counter is an act of investment in your own health and the health of this nation. This Government is changing the incentives for industry and for consumers alike, because a healthier Jamaica is a more productive Jamaica,” said Williams.

She also indicated that the Government will monitor the impact of the tax on prices, consumption patterns, and product reformulation, signalling that further adjustments could be made if necessary as the policy evolves.