herald

Monday 14 October 2019

€31.7m sugar-tax take but not a cent of it goes towards obesity issues

The sugar-sweetened drinks tax raised €31.72m
The sugar-sweetened drinks tax raised €31.72m

The nation's craving for sweet fizzy drinks generated €31.72m in the first year of the sugar tax - but not a cent has been directly spent on tackling the obesity crisis.

The tax on sugar-sweetened drinks came into force in May 2018 in a bid to wean children in particular off high-calorie soft drinks.

All of the proceeds have gone into the Exchequer pool, unlike the UK which is specifically targeting its sugar tax to fund sports and breakfast clubs.

Positive

The tax is, however, having the positive effect of forcing more drinks manufacturers to reformulate their recipes for popular products and reduce their sugar content to avoid the levy.

Dr Donal O' Shea, HSE lead on obesity, is to make a renewed bid to get the Government in the upcoming Budget to pump a substantial slice of the tax takings into improving lifestyle habits and treatment of people who are severely overweight.

"It is a missed opportunity not to use some of the revenue raised in prevention and treatment of obesity. There is a Government policy and action on obesity but it needs resources," he said.

The annual budget for the Healthy Ireland fund has remained around €5m.

However, stark figures show that at least one in five children are overweight or obese, and one in four adults are classed as obese. Asked if it intended to direct some of the sugar tax take to fighting obesity, a spokesperson for the Department of Finance said hypothecation - the dedication of the revenue from a specific tax for a particular expenditure purpose - is not a feature of the Irish tax system in general.

It is opposed to hypothecation of Exchequer receipts as it reduces the flexibility of the Government to prioritise and allocate funds as necessary.

"An annual budget is allocated to the Department of Health as part of the estimates process and that is assigned according to the needs within that department, including in relation to measures to tackle the problem of obesity."

In response, Prof O Shea described this attitude as "tired and tiresome."

Positive

"The reality is that we are at increased financial risk by not treating obesity properly," he said.

He welcomed the fact that the tax is leading to a cut in the sugar content of a growing number of fizzy drinks.

The tax allows a levy of 16c per litre for drinks with between 5-8g of sugar per 100ml. It rises to 24c a 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.

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