Sugar Taxes Won’t Work in Ireland

August 8, 2016 Taxation in Australia

DUBLIN – A sugar tax in Ireland would result in a loss in tax revenues, without any corresponding improvement in taxpayers’ health.

Over the weekend the Irish Beverage Council, released a new report, showing that the introduction of a tax on the sale of sugar-sweetened beverages in the country would result in increased household expenses, decreased sales, and a loss in tax revenues.

The research completed by the Irish Beverage Council, and detailed in the report, suggested that the introduction of a EUR 0.10 sugar tax on a can of soft drink would hike the expenditure of an average household in Ireland by EUR 60 per year.

However, the increases in cost will also result in an overall drop in the number of drinks sold, resulting in a drop in sales of as much as EUR 60 million per year.

Following the drop in sales the government will see total tax revenues fall by EUR 35 million per year, as it loses on out on other forms of tax, due to cross-border purchase of drinks and smuggling.

Further, the reduction in sales and taxes would not even be compensated by any significantly positive health results, as consumption would not fall by enough to improve diets.

Photos By: Jannes Pockele