THE introduction of a sugar tax has been welcomed as 'a landmark day in the fight against obesity in Ireland.'
The tax has been described by health advocates as 'the single most important action Government can take' to tackle the country's escalating obesity crisis.
Minister for Finance Paschal Donohoe yesterday announced measures to introduce a sugar tax by April 2018, in line with the introduction of a similar tax in the UK.
Tax of 30 cent per litre on drinks with over eight grams of sugar per 100 millilitres will be introduced, along with a reduced rate of 20c per litre on drinks with between five and eight grams of sugar per 100 millilitres.
The rates should see an extra 15c added to the price of a can of Coca-Cola, for example.
Mr Donohoe said these rates of tax are consistent with the rates being introduced in the UK in April next year and "our sugar tax will commence at the same time subject to State Aid approval."
The measure was first flagged in last year's budget by then finance minister Michael Noonan and is one of a number of revenue-raising measures in Budget 2018 aimed at improving health in Ireland.
The move has been heralded as a major step forward by health advocates, with Chris Macey, the head of advocacy at the Irish Heart Foundation describing yesterday as 'a landmark day in the fight' against obesity.
"The introduction of a sugar-sweetened drinks levy is probably the single most important action Government can take to tackle Ireland’s obesity crisis," he said.
"The Minister’s announcement demonstrates a significant commitment on the part of Government to meet its duty of care to protect the health of children in particular. We are also encouraged by indications that the measure is already proving effective by prompting beverage companies to reduce sugar content to ensure products fall below the threshold for the tax."
Drinks manufacturer Britvic is among those critical of the measure, though.
The soft drinks company said that it is 'disappointed that the soft drinks sector has been arbitrarily singled out.'
In a statement, Kevin Donnelly, the company's managing director, said, "It is essential that the Department of Finance and Revenue engages with the industry to ensure that Republic of Ireland manufacturers, retailers, wholesalers, publicans and foodservice operators are not disadvantaged versus imported product, especially in an environment of weakening sterling.
"We look forward to constructive engagement as soon as implementation details become clearer, most likely in the upcoming Finance Bill. Given the implementation timeline is less than half that afforded to the industry in the UK, early engagement on this matter is crucial."
SUNBED users and smokers are also targeted with tax hikes as part of Budget 2018.
The two hikes were announced as part of a package of health-promoting taxation measures, Cigarettes will break the €12 mark for a packet of 20 for the first time ever after an increase of 50c was announced by Minister for Finance Paschal Donohue.
It is the sixth consecutive year of increasing costs for smokers, with John Mallon, the spokesman for Cork city-based pro-smoking lobby Forest Ireland, criticising the decision.
"Raising the price of cigarettes for the sixth consecutive budget is unfair because it disproportionately hurts those on lower incomes.
"Paschal Donohoe talks of building a fairer Ireland. Raising tax on tobacco does nothing to achieve that aim. It robs law-abiding consumers of their hard-earned cash and enriches criminal gangs.” The Irish Cancer Society welcomed the increase, though.
Donal Buggy, Head of Services and Advocacy at the Irish Cancer Society said: "The Irish Cancer Society is pleased that price continues to rise. The price hike will encourage people to stop smoking and ultimately save lives.
“Increasing the price of cigarettes is the most effective way of stopping children from taking up smoking and in encouraging people to quit."
Meanwhile, sunbed services will see their rate increase from 13.5% to 23%.
Under the VAT Consolidation Act of 2010, sunbed sessions were allocated a reduced VAT rate as it was ranked alongside the likes of beauty sessions, yoga and nail treatments.
In contrast, a 23% VAT rate was applied to sunscreen.
Minister Donohue said in the Dáil chamber that the increase acknowledges the 'clear evidence' of a link between sunbeds and skin cancer and was made out of a concern for public health.