Tuesday 19 June 2018

Budget 2018: Sugar tax to be introduced, with further hike to price of cigarettes expected

Sugar tax Photo: PA
Sugar tax Photo: PA
Kevin Doyle

Kevin Doyle

A SUGAR tax will be announced in the Budget, Taoiseach Leo Varadkar has indicated.

In an attempt to raise extra revenue the Government are exploring a number of tax initiatives with a charge on fizzy drinks top of the list.

It is expected the ‘sugar tax’ will come into force for April 2018, on the same day that a similar levy is being introduced in the UK.

Speaking at the Fine Gael think-in, Mr Varadkar also hinted that the Government will hike the price of cigarettes on Budget Day next month.

Finance Minister Paschal Donohoe has around €300m for tax cuts and new spending in the budget – but wants to increase this figure by raising money elsewhere.

He has already committed to reducing the tax burden on middle income workers, while the old age pension is likely to get an increase of up to €5.

Mr Varadkar said: “It's always the case that the level of demands and requests for additional spending are much greater than can ever be accommodated in any one budget.

“But I'm so glad that we're not where we were three or four years ago when we were deciding which government departments would take the lion's share of the cutbacks.”

He said every department will get a budget increase for 2018.

“Taken into the fact we want to increase public spending but we don't want to increase public spending too quickly,” he said.

On revenue raising measures Mr Varadkar said: I can't obviously go into specifics today, but it would be typical enough for there to be an increase in cigarettes, that's one of the things under consideration.

“Also, I'm a long-time supporter of the sugar tax and I want to see that introduced next year, but I'm not in a position to get into details.”

This will be the second budget under the confidence and supply arrangement between Fine Gael and Fianna Fáil – but Mr Varadkar indicated he hopes it won’t be the last.

Over the past two days TDs and senators discussed the party’s policy priorities, funding and plans for selection conventions.

However, the Taoiseach told reporters: “In terms of a general election, I'm not planning a general election, I'm determined as I said to make this government work and also make it last.

“I do notice that other parties are making preparations, they are already selecting candidates. We haven't done that yet, but I think it would unwise for any party not to prepare for a general election and we will certainly be doing that.”

He said the budget will stick within the parameters of the agreement with Fianna Fáil.

“There will of course be conversations with Fianna Fáil and Minister Donohoe will lead them over the next number of weeks because any financial resolution will require either their support or abstention,” he said.

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