Government to implement planned tax on sweets, ice cream and soft drinks

Biscuits, buns, and pastries are to be exempt from taxation

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On Thursday, the government decided in its general session that a tax is to be levied on candies and similar sweets, chocolate, cocoa products, ice cream, and popsicles or ice lollies.
     
Initially the tax on sweets was supposed to be the equivalent of almost one euro per kilogram, but now the tax has been set at 75 cents a kilo.
      The tax on sweets was last in force in 1999. At that time (still in the markka era) the tax was the equivalent of EUR 0.58/kg of sweets.
      The planned tax will increase the prices of sweets by some 1 to 15 per cent, while the price of ice cream could rise even more than that. The tax is to come into force from the beginning of next year.
      Biscuits and sweet buns and pastries will be exempt from taxation.
     
At the same time, the excise tax imposed on soft drinks will be increased from 4.5 cents to 7.5 cents per litre. In addition to juices, lemonades, and mineral waters, the tax will be extended to natural mineral waters and milk coffee drinks as well.
      The tax increase in this case will raise the prices of soft drinks by about 0.5 to 5.0 per cent.
     
A group of special diet products, including nutrient fluids used in hospitals, infant formulas, certain weight loss products, and withdrawal products will all be exempt from taxation.
      The aim is to increase the revenues from taxes, particularly in order to cover the gap caused by the abolition of the employer contributions to the basic pension insurance scheme. The planned increase in energy taxes is attributable to the same reason.
      The higher taxes on sweets, ice cream, and soft drinks are estimated to bring additional revenues of about EUR 135 million into the state coffers every year.
     
The government decided to restore the tax on sweets and to increase the tax on soft drinks already in its budgetary talks in the summer of 2009, after which officials started to prepare the details of the planned taxes.
      On Thursday, the government made an official decision on the issue in its general session.


Previously in HS International Edition:
  Planned tax on sweets to include ice cream (12.3.2010)
  Tax on sweets takes experts by surprise (1.9.2009)

Links:
  Social Insurance Institution (KELA)

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