Tax on sugary drinks could raise €122m, officials say

The introduction of a tax on sugar-sweetened drinks remains under consideration despite not being included in the last two budgets, the Department of Finance has said.

Officials in Minister for Finance Michael Noonan's office estimated a 10 cent tax on a can would raise €122 million a year, according to pre-budget documents seen by The Irish Times. They said the Revenue Commissioners warned of cross-Border smuggling if a similar measure was not enacted in Northern Ireland.

However, the assessment of the proposed tax by officials prior to the last budget is less critical than the document prepared a year earlier. Before Budget 2015, officials warned the measure could act as a disincentive to soft drink multinationals in Ireland. It would also impact on retailers and domestic soft drinks producers and would fail to distinguish between sugar-sweetened and artificially-sweetened drinks, they told Mr Noonan.

A year later, they raised no specific issues of concern and pointed out that France raised €373 million in 2014 from a similar measure.

Obesity

Minister for Health

Leo Varadkar

wrote to Mr Noonan last September calling for the introduction of a 20 per cent tax on sugar-sweetened beverages as a way of tackling obesity. He said the measure would result in a 1.25 per cent reduction in obesity, or about 10,000 fewer obese adults.

France, Hungary and Finland have introduced taxes on the volume of sugar-sweetened drinks produced, and Belgium is to follow suit next year. More than 50 per cent of Irish adults are overweight and 25 per cent are obese.