Dáil Éireann Debate, Tuesday - 28 March 2017
113. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue raised by placing a tax on soft sugary drinks as set out in the 2017 tax strategy papers which would apply to water based and juice based drinks which have an added sugar content of 5 g per 100 ml and above and levied at rates per hectolitre (details supplied), as indicated in the 2017 tax strategy paper. [14879/17]
Amharc ar fhreagraThe 2016 Tax Strategy papers estimated potential yields from a tax on sugar sweetened drinks based on a total soft drink sales in Ireland of 685.4 million litres per annum. The TSG papers estimated that the tax would apply to 60% of these sales. My Department has been informed by the soft drinks industry that due to the continual reformulation of products by that industry the total taxable soft drink products in now closer to 50%. Based on this information the estimated yields are set out as follows:
Estimated yields
|
Rate per hl |
€2.46 |
€4.93 |
€7.39 |
€9.85 |
€12.32 |
€24.64 |
€36.96 |
€49.27 |
|
Increase 330ml can (VAT inc) |
1c |
2c |
3c |
4c |
5c |
10c |
15c |
20c |
|
Yield |
€8.4m |
€16.9m |
€25.3m |
€33.7m |
€42.2m |
€84.4m |
€126.6m |
€168.7m |
I have not yet finalised the structure, scope or rate of the tax, so estimates are preliminary and subject to change.
It is important to note that the proposed introduction date of the tax on sugar sweetened drinks is April 2018 and the soft drinks industry continue to reformulate their products, reducing sugar content, in order to limit their exposure to the tax. This indicates that the policy is already having a positive impact prior to its introduction, however, this means that the resulting tax yield will likely be less than estimated.
The UK, who are introducing a similar tax in April 2018, recently revised down their estimated yield from £520m to £380m on the basis of industry reformulation.
