BFK in favour of a "sugar" tax

The Seimas Budget and Finance Committee (BFC), which took up the government's tax reform proposal on Monday, agreed to levy excise duty on sweetened drinks with added sugars.

Nine members of the committee voted in favour of the amendments to the Excise Duty Law, with no votes against and no abstentions.     

The Committee did not support the Rural Affairs Committee's proposal to exempt national heritage products from such a tax.  

„That document (proving that the product has a certificate of national heritage – BNS) should not be an indulgence exempting it from the tax“, – Minister of Finance Rimantas Šadžius told the committee.  

The committee also disagreed with a proposal by „dawn“ Karolis Neimantas to introduce three ranges of sugar content, rather than the two proposed by the government: less than 6 grams, 6 to 10 grams and above 10 grams, with a 25 cent tariff.

The Government proposes to levy excise duty on sweetened beverages containing only added sugars in excess of 2.5 grams per 100 millilitres of beverage or containing sweeteners based on the sugar content of the beverage.

Beverages containing natural sugars, such as from fruit or milk, would not be taxed. 

Sweetened beverages containing 2.5–8 grams of sugar per 100 millilitres are proposed to be taxed at a rate of 7.4 cents per litre, and 21 cents for more than 8 grams. 

Tariffs of €1.05 per litre, or €4.3 per kilo, are proposed for beverage concentrates. 

As BNS reported, the excise duty changes are part of a wider tax reform proposed by the government.

The proposed tax changes include changes to the taxation of real estate, the taxation of some insurance contracts, an increase in the corporate income tax rate by 1 percentage point to 17%, changes to the value added tax, and changes to the taxation of personal income.