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Sugar tax proposal on the way

Finland’s health authorities are planning a replacement for the doomed ’sweet tax’ on confectionary and ice cream. The current levy has been condemned as incompatible with EU law—but the replacement could be in place to curb any rush to the sweet counter.

Finland's 'sweet tax' is on the chopping block after EU officials questioned its legal basis. Image: Henrietta Hassinen / Yle

Brussels has let it be known that Finland’s ‘sweet tax’, which is levied on confectionary and ice cream, is not compliant with EU law. Finland’s health authorities have already come up with a replacement that they say will be more acceptable to the EU mandarins.

The current law’s basis is to collect revenue for the government, and it does not treat different products equally. Therefore it has to go, according to European officials. That’s put Finnish health officials to work looking for a replacement, for understandable health-related reasons.

"From a health point of view the best model would be one that taxes certain products based on their sugar content," said Erkki Vartiainen of the Institute for Health and Welfare (THL).

"The idea is that you remove excess sugar from the diets of children and young people."

The THL has come up with a possible replacement for the sweet tax that would tax products based on their sugar content. The proposal is based on a similar tax in Hungary that hasn’t been flagged up as problematic under EU law.

The Finnish Food and Drink Industries Federation (ETL) has criticised the plans, saying that the proposed tax would have a small effect on sugar consumption but cause big problems for Finnish firms.

"The administrative burden to the state and to companies would be so great that it’d be extremely damaging to Finnish food producers’ competitiveness," said Marleena Tanhuanpää of the ETL.

Tanhuanpää says that the industry already pays some 4.5 billion euros in other taxes, a sum that represents some 8 percent of the Finnish state budget.

She says she’d prefer any additional taxation to come through VAT rather than a new sugar tax. The government’s proposals are due out next spring.

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