Taxes are raised in Ireland (and most other countries) not to regulate something or to improve something directly related to the taxed item, but for the state to make money. But now our government wants to introduce a tax on Sugar-containing drinks to fight obesity.
Well, first of all, I can’t imagine that it will have the slightest impact on obesity. If you buy a bottle of coke for EUR 2 today, then the 20% or 40c increase won’t stop tooo many people from buying that bottle. And if you buy a non-branded 2l bottle of sugar-containing soft drink for maybe 55 or 75 cent then the new price would be 66 cent or 90 cent respectively. Does anybody really think an increase of 11 or 15 cent will change the buying behaviour significantly. Nonsense! Obesity will not be affected in the slightest by these increases.
The only area where it could have an impact is in a pub or restaurant where you already pay a very high EUR 3 or more for a small bottle of soft drink. If the 20% increase would apply there than that is a 60 cent surcharge despite the fact that the tiny 0.2 l bottle has much less of an obesity effect than the 11 cent more expensive 2 litre bottle. Odd!
Another interesting aspect is a comparison to other taxes: If Sugar Drink tax is raised to fight obesity, then Motor tax and fuel tax should be used to improve the roads or even better to improve public transport, but it isn’t directly tied to either. It also should maybe help to reduce accidents, especially fatal ones. But that is not the case. Alcohol tax (duties) should be used to reduce alcoholism, but that is not the case. Instead it is just pocketed by the state.
Actually if a Sugar Drink Tax will be introduced to fight obesity, a NEW (and additional) Alcohol Drink Tax should be also introduced to fight alcohol related illnesses. Because 88 deaths per month in Ireland are DIRECTLY attributable to alcohol and over 14,000 people were admitted to the liver unit in St Vincent’s Hospital for the treatment of alcohol dependence in 2011 and every day, 1,500 beds in our hospitals are occupied by people with alcohol-related problems. In 2012 the whopping amount of EUR 1.5 billion was needed for alcohol related hospital discharges. (Statistics are from alcoholireland.ie/facts/alcohol-related-harm-facts-and-statistics/)
Why am I so much against a Sugar Drink Tax? Because most of us are well able to either limit our sugar intake or make up for it through exercise. But the government doesn’t suggest that people who are not obese do not pay the tax, instead they plan to raise the tax indiscriminately. Even if you are stick thin, you will have to pay the 20% more. That just doesn’t make sense.