Press release
Government welcomes European Commission approval of Sugar-Sweetened Drinks Tax
Published on
Last updated on
Published on
Last updated on
The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, Minister for Health, Simon Harris TD and Minister of State for Health Promotion Catherine Byrne TD today (Tuesday) welcomed the finding of the European Commission that the upcoming sugar-sweetened drinks tax does not constitute State aid.
This allows for the commencement of the Sugar-Sweetened Drinks Tax on 1st May 2018.
The tax on Sugar-Sweetened Drinks was announced as part of Budget 2017 with the launch of a public consultation which ran from Budget night until January 2017. Following on from that process, a series of technical consultations took place with officials from the Department of Finance and the Revenue Commissioners, together with representatives from the soft drinks industry. This positive engagement with industry continued throughout the process. Budget 2018 provided for the final details of the tax including the rates and thresholds.
The legislation governing the tax was delivered through the Finance Act 2017. For reasons of clarity, a legislative amendment will be made in this year’s Finance Act to impose a calcium threshold on products in three exempted subheadings under the EU classification system to ensure exempted products are comparable to dairy.
Ireland has engaged in extensive and constructive discussions with, and submitted a formal notification to, the European Commission to ensure that once commenced, the Sugar Sweetened Drinks Tax does not infringe EU State aid law. With today’s announcement that process is complete and the tax can commence on 1 May 2018.
Commenting on the sugar-sweetened drinks tax, the Minister Donohoe said:
“The Department of Health recommended the introduction of a tax on sugar-sweetened drinks to help reduce rates of overweight and obesity in Ireland. The sugar-sweetened drinks tax is an important signal to industry to reformulate their products to reduce the sugar content offered to consumers. From the consumer perspective, the imposition of a financial barrier on sugar sweetened drinks will result in reduced consumption by incentivising individuals to opt for healthier drinks. The introduction of the tax delivers on the commitment made in the Programme for Partnership Government and will ultimately benefit society as a whole.”
Welcoming the introduction of the tax, Minister Harris said:
“This is significant and positive news and represents major progress under Healthy Ireland towards tackling obesity. With one in four children on the island of Ireland either overweight or obese, this tax is one of a range of measures that can help change parents’ and children’s behaviour. There is no nutritional value in these sugar-sweetened drinks and it has been proven that the intake of these beverages, particularly in children, leads to weight gain and tooth decay.
“Our Healthy Weight for Ireland – Obesity Policy and Action Plan 2016 sets out a range of policy measures and interventions to reduce the number and proportion of overweight adults and children in Ireland and this is one of the significant measures outlined. Industry also has its part to play in this and we hope to see continued reformulation of products to reduce levels of added sugar in these products.”
Minister of State for Health Promotion, Catherine Byrne TD said:
“I am delighted that this sugar tax in now being introduced. This is a very practical measure under Healthy Ireland’s obesity policy and will greatly help parents in their efforts to keep themselves and their children healthy. I believe it will really contribute towards making the healthy choice the easier choice.”
ENDS
Notes to the Editor:
The tax is estimated to yield in the region of €40m in a full year, however, it is expected that as industry reformulates and consumers opt for healthier options this figure will reduce over time.
The tax will be levied at the first point of supply in the State and taxpayers are required to register with the Revenue Commissioners. A Sugar Sweetened Drinks Tax – General Taxpayer Guide, which provides detail around the operation of the tax, is available on the Revenue website here .