Paul Kehoe (Wexford, Fine Gael)
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144. To ask the Minister for Finance his plans to increase the exemption levels on a tax (details supplied); and if he will make a statement on the matter. [37691/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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Sugar Sweetened Drinks Tax (SSDT) is provided for by Chapter 2 of Part 1 of the Finance Act 2017. The tax commenced on 1 May 2018 and applies to first supplies in the State of SSDs. SSDs are water and juice based drinks, in ready to consume or concentrated form, that contain added sugar and have a total sugar content of 5 grams or more per 100 millilitres in their ready to consume form.

The exemption limit for small producers of 13,000 litres per annum is linked to the definition of ‘manufacturer of small quantities of products’ as laid out in S.I. 559 of 2016 European Union (Provision of Food Information to Consumers) Regulations and is based on the requirements for exemption from EU food labelling obligations as set out in Regulation (EU) No 1169/2011. This provides a firm administrative basis for applying the tax.

The relatively low limit for the exemption from the SSDT reflects the public health policy rationale, the feedback received from the Public Consultation on the introduction of the SSDT and also the need to comply with State aid rules.

The public consultation on the introduction of the tax on sugar sweetened drinks in 2016/7 included a question on the application of the tax to small producers. All of the respondents who replied to this question indicated a preference for not providing exemptions for small producers, whether on public health grounds or to comply with State aid rules.

The SSDT is part of the government's Obesity Policy and Action Plan aimed at reducing obesity, particularly in children, in the context of high levels of overweight and obesity in Ireland and high levels of consumption of sugar sweetened drinks. By providing a financial incentive to producers to reformulate their product and to consumers to choose healthier drinks, the Government is seeking to rebalance the sources of energy in people's diet to better align with the HSE's Healthy Eating Guidelines and Food Pyramid.

Therefore the application of the SSDT should be as broad as possible. Providing for a higher 'small producer' exemption limit would serve to undermine the public health rationale for the tax and put the European Commission’s positive State aid decision on the tax as a whole in doubt.

Accordingly, I have no plans to change the exemption provisions.