Sugar tax delay still not sufficient for firms – tax expert

New tariff on sugar-sweetened drinks was to have come into force today

 Bottles of Lucazade fizzy drink are seen on a shelf in a convenience store. Lucozade is one of the brands that has cut its sugar content ahead of the tax. Photograph: Paul Ellis / AFP

Bottles of Lucazade fizzy drink are seen on a shelf in a convenience store. Lucozade is one of the brands that has cut its sugar content ahead of the tax. Photograph: Paul Ellis / AFP

 

The delayed introduction of the sugar tax is still not sufficient to give firms adequate time to prepare, a senior tax expert has claimed.

The new tariff on sugar-sweetened drinks was to have come into force today under the terms of Budget 2018 but was deferred until May 1st by the Government while it awaits European Commission approval.

Deloitte’s John Stewart said the new commencement date still presented businesses with “a very short timeline to get to grips with the tax and understand, not alone the rules that apply to the tax, but also the commercial implications for their business”.

He said guidance on how the tax would operate was issued by the Revenue only on March 20th.

Adminstrative processes

“There are a number of administrative processes that businesses will now have to go through including registering for the tax as a supplier – with a separate registration required for certain exporters, identifying all the products that will be subject to the tax and those that are covered by exemptions, and determining the rate that applies to those products,” he said.

The tax will see 30 cent per litre added to the price of popular sweetened drinks with over 8g of sugar per 100ml.

It will see the price of some popular drinks such as Coke, Pepsi and 7UP rise by as much as 10 cent per can and by 60 cent per two-litre bottle.

The measure is designed to help tackle obesity by incentivising consumers to opt for healthier drinks while also encouraging the drinks industry to reduce the added sugar content of drinks.

It is expected to net the exchequer €40 million in additional tax revenue in the course of a full year.

However, the Department of Finance is still awaiting approval from the commission, which must determine the measure does not contravene European state aid rules. As a result, it was recently forced to push the commencement date to May 1st.

A Department of Finance spokesman said it was confident in securing EU approval.