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HomeEstoniaImplementation of lemonade tax to cost state EUR 5 mln

Implementation of lemonade tax to cost state EUR 5 mln

The introduction of the planned lemonade tax will cost the state five million euros, which is the cost of IT solutions and tax collection, the Estonian daily Postimees writes.

The bill concerning the tax on sweetened beverages was discussed by food producers, doctors and officials at the Ministry of Social Affairs on Wednesday.

“I suppose this meeting was held to tick a box for involvement, because the impact of the tax was not discussed with us before the drawing up of the bill,” Sirje Potisepp, head of the Estonian Food Industry Association, said.

The tax on sweetened beverages is a political agreement that was included in the coalition agreement signed last spring. Two weeks ago, Minister of Health Riina Sikkut came up with a concrete law amendment, with which it is hoped to collect 25 million euros.

Unlike, for example, Portugal, where the tax money is used for healthcare, the lemonade tax in Estonia will go directly to the state treasury. The same is done in Latvia and Finland, where it is not hidden that it is purely a fiscal tax.

However, the introduction of a new tax inevitably entails high costs. According to the Tax and Customs Board, it will cost nearly five million euros, of which 1.9 million euros will be spent on an IT solution and three million euros will be spent on the economic cost of tax collection and the payment of salaries until 2028.

Heli Laarmann, head of the public health department of the Ministry of Social Affairs, said that the new tax will also entail a slight increase in the administrative burden of entrepreneurs, but did not highlight more specific figures.

According to Sikkut, there is an important health aspect to the tax, which is why it is imposed on soft drinks, moreover, at a high rate, which significantly increases the price of drinks and, by all accounts, reduces their consumption. The minister added that by giving up lemonade, no one will lose any nutrients.

MP and deputy chairman of the Social Democratic Party (SDE) Anti Allas told Postimees that this is not a sugar tax, as it is sometimes portrayed as.

“Fans of jam, cake lovers and other consumers of sugar are in no way affected by the tax, since sugar as a separate entity will not be taxed,” he added.

According to Potisepp, energy and juice drinks are also sweetened with sugar, as are juice nectars, which make up two-thirds of the products subject to the tax.

The sugar tax is implemented in more than a hundred countries, but so far it has not been possible to present a direct connection that there is less obesity among the population after the introduction of the tax anywhere.

Laarmann also did not disclose references to such studies to the daily, but noted that such connections have been found in model studies and forecasts. She explained that changes need time and for this a living environment that encourages healthy choices, including a balanced diet, must be created.

Although food manufacturers have also reduced the sugar content of drinks by 10-50 percent in the last five years with consideration to the health of the consumer, this alone is not enough to achieve better health for people, Laarmann said.

“We are dealing with a complex problem that cannot be solved with one measure,” she added.

According to Potisepp, the efforts of the producers and the difficult economic situation are being ignored, because officials have been ordered to formalize this tax.

“We have reached a situation where we have to protect our sector from the government and it is completely incomprehensible,” she added.

Source: BNS

(Reproduction of BNS information in mass media and other websites without written consent of BNS is prohibited.)


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