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PRESS RELEASE: 12.08.2010 Arbitrary excise tax on sweets, ice cream and soft drinks distorts competitionThe Federation of the Brewing and Soft Drinks Industry and the Association of Biscuits and Confectionery Industries have today, Thursday 12 August, filed a joint statement with Finland’s Ministry of Finance regarding the proposed excise tax on sweets, ice cream and soft drinks. The statement details the tax’s drawbacks and aims to initiate debate on the so-called ‘sugar tax’. A sugar tax, whose base would be clearly broader than the proposed sweets tax, would be a fair solution to the current proposal’s problems. The Federation of the Brewing and Soft Drinks Industry and the Association of Biscuits and Confectionery Industries’ statement highlights how the Government’s proposed excise tax on sweets, ice cream and soft drinks would distort competition by discriminating against individual companies. “We don’t oppose taxation per se, only the arbitrary way in which the planned tax would be levied on only a few companies in the food and drink industry. The proposed taxation model would distort competition within the industry and its narrow scope makes it tough on individual companies. According to the proposal, the tax would be levied on only a fraction of the 1,000 companies in Finland’s food and drink industry,” says Pekka Tiainen, Chairman of the Board of Directors of the Federation of the Brewing and Soft Drinks Industry. Proposed tax illogical “Many product groups containing sugar will therefore remain outside the scope of the proposal, while spring and mineral waters and functional foods containing Xylitol would be taxed,” adds Tiainen. The tax burden of
individual companies would rise by up to tens of millions of euros “This narrow scope will lead to a significantly higher tax rate on individual products. The new sweets tax will be approximately 64 per cent higher than the old sweets tax was when it was abolished in 2000 (EUR 0.95/kg vs. EUR 0.58/kg). The proposed tax rate would increase the tax burden of individual companies – for some by several million euros and for others by up to tens of millions of euros,” says David Nuutinen, Managing Director of Leaf Suomi Oy. The statement also expresses an opinion on the proposed tax rate, its unfavourable impact on competitiveness, grey imports, and its impact on public health. The Government has scheduled the new tax to come into force at the turn of the year, but instead, the statement requests a transitional period of at least six months from the date of the final decision. An unbiased ‘sugar tax’ is the solution “However, if the Government does decide on another form of taxation, then it should use an unbiased model based on sugar content. This so-called ‘sugar tax’, whose base would be clearly broader than the proposed sweets tax, would solve the current proposal’s problems,” says Tom Lindblad, Managing Director, Fazer Confectionery Finland. The excise tax will go before Parliament during the autumn and the Government would like the new tax to come into force at the turn of the year 2010–2011. “Our goal is to get the Government to commit to moving away from the proposed model and towards a fairer sugar tax. This target – developing the system towards a tax based on sugar content – should also be entered into the next government programme. Work towards developing a new taxation system should, however, begin during this government term,” stresses Lindblad. The statement filed with the Ministry of Finance by the Federation of the Brewing and Soft Drinks Industry and the
Association of Biscuits and Confectionery Industries on 12 August 2010 (In Finnish) . (pdf)
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