EU approval removes final hurdle for Irish sugar tax

By Geoff Percival

The EU has formally approved the Government’s sugar tax plan, removing the final hurdle to the levy which is set to be introduced next week.

The Government had intended on introducing the tax at the beginning of this month, but the wait for the official nod from Brussels, and confirmation that it didn’t break state aid laws, delayed the move.

The European Commission yesterday said the Irish tax does not constitute state aid.

“The measure’s scope and design are consistent with the health objectives pursued by Ireland, namely tackling obesity and other sugar-related diseases,” it said.

It said soft drinks were a particular concern because they lacked nutritional value and were especially liable to over-consumption.

The ruling could help head off any challenges to taxes in other EU countries — like the UK and France — which have also imposed some form of tax on drinks with added sugar to cut consumption for health reasons.

The Department of Finance recently dismissed calls from tax advisory giant Deloitte to further delay the levy until July, in order to allow beverage makers more time to ready themselves.

The tax will apply to sugar-sweetened drinks with a sugar content of between five and eight grams per 100ml, at a rate of 20c per litre and 30c per litre for anything over eight grams.

It will likely increase the cost of a can of soft drink by 10c and bring in €40m per year for the exchequer.

Additional reporting Reuters