Michael McGrath (Cork South Central, Fianna Fail)
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13. To ask the Minister for Finance if it is logistically possible to introduce a tax on sugar sweetened drinks in 2017, in the event of a decision being made to proceed with such a tax; and if he will make a statement on the matter. [17529/16]

Michael Noonan (Limerick City, Fine Gael)
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The introduction of a tax on sugar-sweetened drinks (SSDs) is part of the Programme for a Partnership Government. The tax will contribute towards important public health goals, as well providing a new source of revenue for public spending and contribute towards funding the reduction in personal taxes.

My officials, together with officials from the Department of Health and the Revenue Commissioners are considering the design and application of the tax on SSDs in order to achieve the goals set out in the Programme for a Partnership Government.  This consideration will also include the implementation issues which would arise in introducing an SSD tax in Ireland. As the Deputy may be aware, unlike alcohol and tobacco, SSDs are not a controlled product under the EU general excises directive, and therefore cannot be stored in tax warehouses for release and tracking so that raises issues in itself. Therefore, it will be crucial that effective compliance measures are incorporated in the design of the tax to support collection in a Single Market environment in which the free movement of products cannot be impeded and products cannot be made subject to cross-border or excise movement controls.

It should be noted that the UK announced the introduction of a soft drinks industry levy in March 2016, with an extensive period of industry and stakeholder consultation, before the levy is actually imposed from April 2018.  Given the border that is shared between Ireland the UK, and the supermarket chains which operate and supply SSDs in both jurisdictions, it is important that we examine carefully how the UK tax will operate, and consider the effects that the design and timing of the introduction of the UK tax may have on an Irish tax on SSDs.

At this point I have confidence that a tax on SSDs can be introduced from 2017. However, I will want to carefully consider all aspects of the design and the implementation plan before making my decision. If I find that the compliance and trade distortion risks that could arise, by applying such a tax in Ireland without a similar measure in the UK, are too high, I may decide to wait until the UK Soft Drinks Industry Levy is in place before I introduce the tax. Whether the tax is introduced in 2017 or not will ultimately be a matter for Budget 2017.