Dáil Éireann Debate, Tuesday - 4 April 2017
186. Deputy Joan Burton asked the Minister for Finance when a new tax on sugar drinks will be introduced; the estimated annual yield from such a tax; the rate at which the new tax should be set and the types of drinks included within its scope; the preparation currently being undertaken in this regard; and if he will make a statement on the matter. [16358/17]
Amharc ar fhreagraIt is my intention to introduce a tax on sugar-sweetened drinks in April 2018, to coincide with the introduction of a similar tax in the UK at that time.
The 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.
|
€ |
€ |
€ |
€ |
€ |
€ |
€ |
€ |
|
|
Rate per hl |
€2.46 |
€4.93 |
€7.39 |
€9.85 |
€12.32 |
€24.64 |
€36.96 |
€49.27 |
|
Increase 330ml can |
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 |
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 recently revised down their estimated yield from £520m to £380m on the basis of industry reformulation.
I have not yet finalised the structure, scope or rate of the tax, so estimates are preliminary and subject to change. Officials from my Department are engaged in ongoing communication with the soft drinks industry to ensure the tax, when introduced, is effective and implemented in an administratively straightforward manner. It is expected that the underpinning legislation will be introduced in this year's Finance Act.
