€40m sugar-tax take will not be used to tackle obesity crisis

THE €40m-a-year to be generated from the sugar tax on fizzy drinks will not go directly to the health service or tackling the obesity crisis, the Department of Finance has confirmed.

Details of the tax, which comes in next April, will be outlined further in the Budget.

It could see a 10c hike on a 330ml can of a sugary soft drink.

The spokesman for the Department of Finance said ringfencing the proceeds would reduce the flexibility of the Government to prioritise and allocate funds as necessary at a particular time.

Since the tax was signalled here and in the UK, several drinks have been reformulated to reduce or eliminate their sugar content.

Options

This will reduce the revenue from the tax, but meet the objective of public health campaigners to make more low-sugar or zero-sugar options available.

Reformulated drinks include Lucozade, Sprite and Fanta. PepsiCo said that two thirds of its single-serving drinks will have 100 or fewer calories by 2025. It has even had a knockon effect on popular confectionery, although the tax is confined to soft drinks.

A Kit Kat bar now has extra milk and cocoa to reduce sugar.

It is expected the planned sugar tax on drinks will be tiered, starting from no tax on diet and low-sugar drinks.

There is likely to be a low tax on mid-sugar drinks containing 5-8g of sugar per 100ml. The tax will be higher on very sugary drinks containing 8g or more.