The tax rate will depend on the amount of sugar contained and whether sweeteners are used. Some products, such as milk and dairy products and natural juices, are exempt from the tax.

The tax is progressive to motivate producers to reduce the amount of sugar and the use of sweeteners in beverages and to guide consumers towards preferring drinks with less sugar and without sweeteners due to the price increase of high sugar content drinks.

For example, for a half-liter soda containing five to eight grams of sugar (the lowest tax rate) per 100 milliliters, the tax is 7.5 cents, meaning the tax rate for a liter of such a drink is 15 cents.

The highest tax rate applies to drinks with at least eight grams of sugar per 100 milliliters. In this case, the tax for a half-liter drink is 22.5 cents.

For sweeteners, beverages will be taxed from the first gram.

Alcoholic beverages are exempt from the tax, but non-alcoholic beer and energy drinks will be subject to it. However, so-called craft lemonades and medicines are exempt from the tax.

According to the World Health Organization's recommendations, the tax rate applied to sweetened beverages should increase the product price to the consumer by at least 20 percent to influence consumer behavior.

The so-called sugar drink tax is one of the tools to reduce youth overweight and obesity, according to Health Minister Riina Sikkut.

"There are already three times more overweight young people than 20 years ago. Of course, the sugar drink tax alone will not solve the problem, but it is one way to direct children, as a price-sensitive group, towards healthier choices," Sikkut said.

Eha Nurk, the lead researcher at the Department of Chronic Diseases of the National Institute for Health Development, cited a recent study showing that in Estonia, 31 percent of 1st to 7th-grade students are overweight or obese. One in three boys and one in four girls are overweight.

Research has proven that, in addition to increasing body weight, the excessive consumption of sweetened beverages increases the risk of chronic diseases and damages teeth. Excessive consumption of sweetened drinks is also associated with cardiovascular diseases, type 2 diabetes and certain types of cancer.

Taxes influencing health behavior are a growing trend, and the most common are those on sweetened beverages – such a tax has been implemented in over 100 countries to date, including Finland, Latvia, Belgium, France, the United Kingdom, Italy, Poland, the Netherlands and Portugal.

According to Sikkut, the sweetened beverages tax was not implemented indiscriminately, as done in Finland, for example, where even bottled drinking water sold in stores is taxed.

For lemonades sold in Estonia, most currently have a sugar content of over 10 grams per 100 milliliters.

In its current form, the tax would hike the price of a two-liter bottle of cola by 48 percent, from €2.29 to €3.39, and that of a 1-liter carton of sweetened orange nectar by 32 percent, from €1.69 to €2.24.

The new tax will take effect at the beginning of next year.

Understandably, the new tax will also impact the state budget. The tax on sweetened beverages is expected to bring in an additional €25 million next year.

Since the main goal is to reduce the production and consumption of taxed products, it can be assumed that the tax revenue collected for the state budget will decrease over the years.

Health minister: We did not want to make food more expensive

Minister Sikkut told ERR in an interview that the experience of other countries suggests taxes that have a progressive rate based on the sugar content of drinks tend to result in healthier recipes.

"No one thinks that we can reverse the trend of youth obesity through a single tax, but it is another measure on top of what we are already doing to get kids to move more and offer them a healthier diet," she said.

Asked why tax sugary drinks and not foods, Sikkut said that this would also hike the prices of staples, such as bread, which is not the tax's purpose.

"This would have a much bigger impact on low-income households, and there are a lot of foods that contain sugar regarding which we do not want to see a significant drop in consumption. But sweetened drinks are products that no one really needs, neither adults nor kids."

Regarding the decision not to tax sweet dairy products, such as drinkable yogurts, Sikkut said that dairy rather falls in the category of food.

"There will likely be a lot of questions regarding specific types of products in the feedback round. In the end, it is a matter of discussing these things and making a decision. There is no final truth. We may eventually decide to also tax sweetened yogurts that do have high sugar content, but it is the proposal of the Ministry of Social Affairs at this time to limit ourselves to traditional beverages to which sugar is added," she said.

EKRE MP: Tax is pointless

Marilin Jürisson, Rimi Estonia's purchasing manager, said more and more sugary drinks are being bought. 

"You can certainly point to those shops that are close to schools, the gyms where the kids are exercising, there's definitely a trend there, they are being bought," she said.

"It's hard to say how this (tax) will affect people's consumption habits. The purpose of the tax is certainly questionable. Is it a desire to encourage people to consume more drinks with sugar substitutes, which can start to cost less than their sugar substitutes?" Jürisson told Wednesday's "Aktuaalne kaamera".

EKRE chairman Martin Helme told AK the tax is pointless. The opposition MP said it will not change consumption habits or bring more money to the budget.

"What we have seen in other countries is that it has absolutely no effect on people's consumption behavior. So, in other words, it does not in any way meet the stated objectives, if the stated objective is that people consume less sugar," he said.

Politicians attempted to introduce a similar tax in 2017. The bill was approved by parliament but rejected by the president.

The article was updated to add comments from Health Minister Riina Sikkut, and then again to add comments from EKRE Chairman Martin Helme and Rimi.

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