Sugar Sweetened Drinks Tax comes into effect today... will it work against our obesity crisis?
The Government's new sugar tax on soft drinks takes effect today.
From today, Irish consumers will see high-sugar drinks become more expensive under the Sugar Sweetened Drinks Tax.
The tax will see a levy of 16c per litre for water or juice-based drinks with between 5-8g of sugar per 100ml. It will rise to 24c per litre for varieties with more than 8g.
When VAT is included this works out at 20c per litre for drinks with between 5-8g of sugar per 100ml, and 30c per litre for drinks with more than 8g of sugar per 100ml.
The tax only applies to water and juice-based drinks with added sugar. Fruit juices and dairy products are exempt from the tax on the ground that they offer nutritional value.
The tax is hoped to generate up to €40m for the Exchequer in the first year.
The measure could be seen as an initiative for soft drinks companies to reformulate their products in order to avoid the tax. As many as three-quarters of all soft drinks now sold in the Republic have less than 5g of sugar per 100ml.
It is hoped the sugar tax believe it will play an important role in tackling Ireland's obesity crisis, with one in four Irish children currently overweight or obese.
The move has been welcomed by the Irish Heart Foundation, which has been campaigning for the levy for seven years.
Head of advocacy, Chris Macey said the introduction of the tax is the most significant day yet in the fight against childhood obesity in Ireland.
He said it was a clear signal that the Government was prepared to take tough action to tackle the crisis and the decision has already paid off due to a major programme of reformulation by manufacturers to reduce sugar levels below the thresholds chosen for the tax.
Mr Macey said the tax could have a greater impact if at least a portion of the proceeds was ringfenced to fund measures targeted at children’s future health, particularly in disadvantaged areas where obesity rates are highest.
He suggested that the revenue could support a wide range of measures, including the development of new family food initiatives, further expansion of the school meals programme, removal of vending machines and the provision of free drinking water in all schools.
However, the Department of Finance said reserving a tax for a particular purpose is "not a feature of the Irish tax system in general".