When the new government coalition was set up, it was said that the so-called lemonade tax would be 20 cents per liter regardless of the beverage's sugar content, the newspaper said. Now Ossinovski wants the tax to be imposed as a graduated-rate tax.

"When there are different tax tiers and the difference between these tiers is big enough, businesses will definitely want their products to be in the lower tier so that they are cheaper and thereby more competitive," the minister and chairman of the Social Democratic Party said.

Ossinovski also said that the government would likely not levy the tax on dairy products containing lactose. "When it comes to products containing naturally occurring sugar, I'm skeptical of the possibility that a tax could be levied on them," he said.

The minister added, however, that taxing dairy products with the sugary drinks tax would be fair when it comes to other categories of goods and the health impact of sugar-sweetened dairy products, as in Estonia these products contain a lot of sugar.

Plans are for the sugary drinks tax to take effect from the beginning of 2018.