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Tax on sweets and ice cream to be dropped

The government tax on candy and ice cream will be abandoned beginning in January, 2017. Soft drinks will retain their tax. Health authorities say the move is a step back.

Karkkeja tehtaan hihnalla.
Health authorities urge other ways of curbing sugar intake. Image: Yle

A ministerial committee on economic policy has decided that the tax on sweets and ice cream will be eliminated beginning in 2017. Soft drinks will still be taxed, but products to be taxed are being reviewed.

The government is cancelling the sweets tax following talks with the European Commission, which said that Finland's sweets tax is unequal: it favours domestic sweets because similar products from abroad are also subject to customs duty. Two state complaints were made over the tax.

If the tax system is seen to include forbidden government support, ten years' worth of the tax may be recovered for products outside of the system, with interest.

Sweets are expected to accrue 256 million euros in taxes this year, with 147 million coming from soft drinks and 109 million from candy and ice cream.

Soft drinks have been taxed since 1940 while a tax on the production of candy was reintroduced in 2011 and extended to include ice cream.

Soft drinks technically include non-alcoholic drinks such as lemonades, energy drinks, flavoured water, various juices and fruit or vegetable beverages, but not milk.

THL: Sweets tax not cure-all for sweet consumption

Specialist Heli Reinivuo from the National Insitute for Health and Welfare (THL) says she and her organisaiton consider the sweets tax drop unfortunate and against EU statutes.

"Affecting consumption via taxation is just one method of keeping sweet-eating in check and preventing sugar from accumulating in the body," Reinivuo says.

The THL says the removal of the tax is not a return to the situation preceding its reinstitution five years ago. Reinivuo says that sugar consumption levels can be better influenced in future by educating the populace and with the placement of candy vending machines in schools and public spaces.

The health watchdog considers the sweets tax, now planned to be scrapped, a fairly effective method of steering consumption. Reinivuo says the tax has been especially important in low-income consumers and households.

In 2011 when the tax was applied the government did not investigate any other methods of affecting sugar consumption.

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