Michael D'Arcy (Wexford, Fine Gael) | Oireachtas source

I will read the note on the tax on sugar-sweetened drinks. Chapter 1 of the Bill provides that a sugar-sweetened drinks tax will apply when such drinks are first supplied in the State. The introduction of this tax forms part of the Government's comprehensive plan, A Healthy Weight for Ireland, which aims to tackle the obesity and overweight problem in this country. The tax will apply to non-alcoholic water and juice-based drinks which contain added sugar and which have a total sugar content of 5 grams or more per 100 ml. Liable products will be identified by reference to the combined nomenclature classifications of goods to nutritional information required under the EU-wide food labelling regime.

I am not quite sure what the word "nomenclature" means. However, it refers to classifications of goods and to nutritional information required under the EU wide food labelling regime. The tax is to be charged when sugar sweetened drinks are first supplied in the State by a supplier and that supplier will be responsible for the payment of the sugar sweetened drinks tax. A relief may be granted, by way of repayment, where liable products that have previously been supplied in the State are subsequently supplied outside the State. Provision is also made for products exempted from certain food labelling requirements to be excluded from the scope of the tax.

There will be two rates of tax, with the lower rate applying to sugar sweetened drinks with a sugar content of 5 g or more but less than 8 g per 100 ml. The higher rate will apply to liable products with a sugar content of 8 mg or more per 100 ml. The charge will, when VAT is included, amount to 20 cent and 30 cent per litre for products liable for the lower and higher rates, respectively.

The yield from the sugar sweetened drinks tax, when VAT is included, is expected to be around €40 million in a full year. The tax will be commenced by ministerial order no later than April 2018 and after the necessary formal approval from the European Commission that the measure is free from state aid.

I hear what the Deputy is saying but it is the final piece of the action plan on obesity by the Department of Health. Effectively, the Deputy has said that the tax is a blunt instrument but I contend that it is a start. If the provision does not do what we hope it will do then it can be looked at again. It is certainly the direction in which we intend to move. Our experience is the more one taxes unhealthy products the less they are used and we think it is the right direction.