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Estonian finmin expects sugar tax to bring EUR 24 mln into 2018 state budget

BC, Tallinn, 05.04.2017.Print version
Estonian Finance Minister Sven Sester wants to implement a multi-stage sugar tax which would be between 20 and 36 cents per liter and the expected tax receipts would total 24 mln euros as of 2018, reports LETA.

If the tax amendment is adopted, the price of a soda that contains five to eight grams of sugar per 100 milliliters would increase by an average of 35% and the price of a soda that contains more sugar would rise by 50% on average.

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

For consumers to have 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 a soda 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 a soda that contains 9 gr or more per 100 ml, and a year later on a soda that contains 8 gr or more per 100 ml.

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

If Estonia decides to not impose the sugar tax on juices without added sugars, Estonia has to request permission from the European Commission to grant state aid.

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