Seimas Committee: in favour of a sugar tax, except on national heritage products

The Parliament's Committee on Rural Affairs has endorsed the Government's proposal to levy excise duties on sweetened beverages, but not on national heritage products. 

On Wednesday, four members of the Seimas voted in favour, two voted against and two abstained, and the committee chairman voted in favour of the amendments to the Excise Act.  

Finance Deputy Minister Kristupas Vaitiekūnas explained that  preferences are not allowed for any group of products.         Exclusion is not allowed because it would be discrimination of other products and would violate the rules of the World Trade Organization (WTO),– K. Vaitiekūnas told the committee on Wednesday.  

At the time, Deputy Agriculture Minister Andrius Palionis argued that, for example, the recipe of a beer with a certificate of national heritage cannot be changed, which means that it must contain as much sugar as the recipe stipulates. 

 Manufacturers cannot make use of alternatives (to sugar –  BNS), – said Palionis. 

K. Vaitiekūnas told the committee that the proposed sugar tax was similar to the one in Latvia. Apart from the fiscal benefits, he said, the tax would benefit people – they would consume less sugar.  „Most sweetened drinks would cost about 25 cents per litre“, – he said. 

„State citizen“ Bronis Ropė was angry that the tax „targets families“. „When I was raising my children, they mostly drank such drinks. Two litres of Coke are 25 cents more expensive than two litres of Coke it's not a joke here, maybe it's a target against families“, – wondered Mr Ropė.

K. Vaitiekūnas said that there are few cases in Europe where a sugar tax is levied on all products containing it, but the ministry has not considered such a proposal.  

„That's why we have not even considered it (taxing all sugar-containing products – BNS). The first step could be to tax these beverages, and then, seeing the change in consumer behaviour, tax collection, one could consider broadening the tax base,“ said the deputy minister.  

K. Vaitiekūnas stressed that beverages with sweeteners will also be taxed. 

„Let's not be fooled into thinking that sugar will be replaced by sweeteners and that these drinks will not be taxed“, warned Kęstutis Mažeika, chairman of the committee.  

The Vice-Minister said the tax is expected to raise €25 million for the budget. 

The government proposes to levy an 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 amount of sugars in the beverage.

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