Sester expects sugar tax to bring €24 million into 2018 state budget

If implemented, the tax could temporarily increase the price of sugary drinks by 35-50 percent. Source: (AFP/Scanpix)

Estonian Minister of Finance Sven Sester wants to implement a multi-stage sugar tax which would be between 20-36 cents per liter and which is expected to generate tax receipts totaling €24 million as of 2018.

If the tax amendment is adopted, the price of a soft drink containing five to eight grams of sugar per 100 milliliters would increase by an average of 35 percent, while the price of a soft drink containing more than eight grams of sugar more sugar would rise by 50 percent on average.

An analysis of consumers' health behavior showed that in order to influence the health behavior of consumers, the tax rate should raise the cost of a product's unit of volume by at least 20 percent, Sester said at Wednesday's Cabinet meeting. For the tax to motivate producers to add less sugar into their drinks, the tax should be multi-stage, he added.

In order to allow producers enough time to change their recipes and consumers to get used to the new products, Sester wants to implement the sugar tax in stages. As of 2018, the tax rate for soft drinks that contains 10 grams of sugar or more per 100 ml would be 36 cents, while as of 2019, the tax rate would be implemented on soft drinks containing nine grams or more per 100 milliliters, and one year later on soft drinks containing eight grams or more per 100 milliliters.

Should a tax also be imposed on juices without added sugars, expected tax receipts, including VAT, would total €24 million in 2018 and 2019 and €25 million in 2020.

Should Estonia decide not to impose the sugar tax on juices without added sugars, Estonia must request permission from the European Commission to grant state aid.

Editor: Aili Vahtla

Source: BNS

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