According to the group, the money raised could go to subsidising healthy food, so that it's cheaper and more attractive to shoppers.
Michael Moore, chief executive of PHA said that a sugar tax would be no different from taxing tobacco.
He remarked that while the industry is making big profits out of junk food, it's actually the taxpayer paying for the results.
He also pointed to the skyrocketing health costs relating to obesity and other dietary related diseases as an example of a transfer of money from the taxpayer to big industry.
Moore said that though state health ministers unanimously rejected traffic light labels on food, he is optimistic about alternative labelling.