How Taxes Affect the Economy – The Case of the Sugar-Sweetened Beverage Tax in Slovenia,

This thesis, How Taxes Affect the Economy – The Case of the Sugar-Sweetened Beverage Tax in Slovenia, explores the role of taxation as a key instrument of public finance, focusing on the economic, health, and social impacts of introducing a tax on sugar-sweetened beverages.

The measure, effective from January 1, 2025, raised the VAT rate from 9.5% to 22% for beverages containing added sugar or sweeteners, sparking debate about its effects on consumption, producers, the national budget, and public health.

The research defines the concept and types of taxes in Slovenia, analyses the historical and legal framework of taxation, examines the implementation of the sugar-sweetened beverage tax in Slovenia and abroad (e.g., the United Kingdom), and evaluates its economic and health impacts.

Four hypotheses were formulated: (1) the historical development of taxation is linked to economic growth (case of Estonia), (2) the tax affects the volume of sales, (3) companies adopt cost-management strategies, and (4) the tax influences the reallocation of human resources in the food industry.

The methodology includes analysis of public data sources, a case study, international comparison, and an empirical survey with 102 respondents. Results show that Slovenia’s tax system is historically developed and aligned with European standards.

The tax is poorly received – most consumers notice price increases, but only a minority reduce consumption, indicating limited behavioural and health effects. Companies report minimal impact on sales volume but respond by raising prices, changing packaging, and developing healthier alternatives. The comparison with Estonia confirms the link between tax policy and economic development.

The conclusion emphasizes that the tax does not fully achieve its public health objectives and is primarily fiscally oriented. Consumers and businesses express distrust in the targeted use of collected funds, highlighting the need for greater transparency and improved communication from the government.

To enhance the measure’s effectiveness, complementary actions such as awareness campaigns, incentives for product reformulation, and public reporting on tax revenue usage are recommended. As the tax has only recently been implemented, repeating the survey in future years would provide more realistic and long-term insights into behavioural changes and industry responses.