Sugar tax raised €16. 5 million in 2018

By June Shannon Policy News   |   14th Jan 2019

Sugar sweetened drinks tax raised €16.5 million in just six months but funds will not be ring-fenced for health promotion.

The Government raised €16.5 million in 2018 from the sugar sweetened drinks tax (SSD) or ‘sugar tax’ however, these funds will not be invested into public health measures such the promotion of children’s health and wellbeing as is the case in the UK.

In the UK the SSD tax raised GBP153.8 million or €172.5 million from when it was first introduced in April 2018 to the end of October 2018. Revenue collected from the levy in the UK will help fund physical education activities in primary schools, the Healthy Pupils Capital Fund and provide a funding boost for breakfast clubs in more than 1,700 schools.

The SSD tax was introduced in Ireland on 01 May 2018 and it applied a 30 cent per litre tax on drinks with more than 8g of sugar per 100ml and a 20 cent per litre tax on drinks with between 5 and 8g of sugar per 100ml.

The Irish Heart Foundation has long called for a portion of the proceeds from the SSD tax to be ring-fenced to fund measures to prevent childhood obesity in Ireland

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According to recent figures from the Department of Finance, the SSD tax yielded €0.2 million or €200,000 in July 2018, this increased to €4.7 million in August and €0.4 million or €400,000 was raised in September.

In October 2018 the revenue collected from the SSD tax was €5.7 million, it was €0.5 million or €500,000 in November and a total of €5 million was collected in December, bringing the total revenue raised from this tax to €16.5 million in just six months.

The Irish Heart Foundation has long called for a portion of the proceeds from the SSD tax to be ring-fenced to fund measures to prevent childhood obesity in Ireland.

However, in a statement the Department of Finance said, “Hypothecation (the dedication of a specific tax for a particular expenditure purpose) is not a feature of the Irish tax system as it reduces the flexibility of the Government to prioritise and allocate funds as necessary at a particular time.”

"The SSD tax should be seen as a public health measure, not a revenue raiser and, as such, it’s income should be ring-fenced and reinvested back into the communities and services where it will have the greatest effect such as health promotion and schools,”

Kathryn Reilly, Policy Manager, Irish Heart Foundation

Commenting Ms Kathryn Reilly, Policy Manager, The Irish Heart Foundation, said the only thing stopping the ring-fencing of this tax for public health measures in Ireland was political will.

“The SSD tax should be seen as a public health measure, not a revenue raiser and, as such, it’s income should be ring-fenced and reinvested back into the communities and services where it will have the greatest effect such as health promotion and schools,” she said.

According to Ms Reilly, “We have seen the ability of the Department of Finance to ring-fence taxes previously in this way and, with a crisis in public health as obesity costing the Irish State €1.13 billion in direct and indirect costs, it makes social and economic sense that this revenue should be invested in health measures, distinct for the health vote.”

“Recently the Taoiseach made comments on the carbon tax and reinvesting this back into households as its main aim is to change behaviour. Ring-fencing is possible. It is clear that it is only political will holding back on this ring-fencing the SSD tax at a time when it is most needed, and when we have an obesity plan in urgent need of investment,” Ms Reilly stated.

 

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