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February 9th

Sweet tax?

Wednesday, 04 November 2009 15:29 KR
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Extra taxes on candy and fatty foods could boost the state’s coffers by 1.5 billion kroner a year

The taxes on unhealthy food, being introduced from the start of next year, are going to cost consumers more than a billion kroner a year.

A new analysis from the Confederation of Danish Industry’s Food Branch (DI) shows the new taxes on sweets, chocolate, soda and ice cream will bring the state an additional 1.5 billion kroner annually – making Danish treats the most costly in the EU.

The government has also mooted the possibility of a saturated fat tax of 25 kroner per kilo on cheese, butter, margarine and vegetable oil, which is likely to be introduced from mid-2010.

The new taxes will represent a 27 percent increase in food charges according to the new analysis.

In realistic terms, consumers are likely to see the price of a 100g chocolate bar increase by 44 øre, a litre of ice cream by 1 krone and a large bag of sweets by 2 kroner.

While the prices do not represent a huge increase, they will push Denmark to the top spot in the EU when it comes to unhealthy food taxes.

Only five other EU countries have taxes on soda and Denmark has the highest rate at 1.14 kroner per litre, with the Netherlands in second place with a tax equivalent to 41 øre per litre.

Denmark is also the only EU country that taxes candy and chocolate and the proposed saturated fat tax will be the first of its kind in Europe.

DI branch director Ole Linnet Juel is worried about the effect the tax will have on Danish retailers from next year.

‘The argument to introduce the new taxes is based on health, but one could wonder if it will have the desired effect when the price difference on candy and soda in Dnemark, Germany and Sweden will be even greater,’ Juel told Berlingske Tidende newspaper.

Juel believes more shoppers will head across the borders to stock up on purchases, reducing the competitiveness of Danish products.

 

Comments
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bored!  - Ridiculous   |2009-11-04 17:48:00
This tax is ridiculous.

Yes I can understand the intended result of a healthier population, less diabetes, etc in turn lowering the Danish Medical Bills but please aren't there enough taxes.

I have also read that soon everyone will have to order these items over the counter as well!

Question to the Government, Do people who currently have Diabetes and require high sugar sweets to help stabilise their blood sugar, get a tax refund on this or is it just tough luck?

My advice, if they want to introduce a new tax, put it on Cigarettes. That's the real problem for both health and society in Denmark.
magic1964   |2009-11-04 19:49:52
And I will vote for the party who make wine tax free....vive le vin et viva el vino....
wor  - Come on, seriously!   |2009-11-05 11:27:18
"The argument to introduce the new taxes is based on health"...come on, seriously. Pull the other one.

I wonder what they say the reason is for having tax on books...the so called "Tax on learning".
Jon_Casey  - How about removing VAT from fresh and health produ   |2009-11-05 11:35:04
I agree with you bored, I think that although higher prices for sugary, fatty and unhealthy foods is not necessarily a bad idea, this could be achieved much more reasonably through the removal of taxes on healthy foods ie. The removal of the 25% VAT on fresh fruit and vegetables, rather than another tax that will just push up the general cost of living. Wouldn’t that be a much better and fairer solution for all?

I would draw your attention to the comments of single mum who was lucky enough to win the Danish lottery from a previous CPH post article:
http://www.cphpost.dk/news/national/88-national/46359-lotto-joy-for-single-mum.html

“The lucky winner said she will use the money to move home, saving for the children’s education and enjoy simple pleasures like being able to afford fresh fruit and vegetables.”

Doesn’t that just sum up the situation perfectly? Rather than looking to increase the price of food through more taxation, the government should be reducing the costs associated with healthy, fresh produce, and by doing so, they would also be addressing their concerns for a heather nation.
damestjernelys  - I suggest   |2009-11-05 15:12:19
They do both. Remove the VAT on fresh fruits and vegetables AND tax the sweets, soda, etc.
JFD   |2009-11-06 13:42:47
Mr. Casey: Excellent suggestion, it would fall on deaf ears, but an excellent suggestion none-the-less.

Obviously, the fact prices will increase slightly via this tax is not in-and-of-itself disturbing because this tax won’t cause a decrease in anyone’s quality of life (like , for example , a 180% tax on cars). What is most disturbing is that the Danish government is overtly using taxation as a means of trying to control our behavior. The quote “The argument to introduce the new taxes is based on health...” sums it all up. The government assumes you are not responsible enough to control your intake of unhealthy foods, so they want you to stop by increasing the food item's price.

Does anyone appreciate how awful and unjust the practice of using taxation to control behavior is?

Taxation is the core of a country’s fiscal policy, it shouldn’t be used as a weapon for health policy, environmental policy, transportation policy, etc. Obviously it has been done on cigarettes and while I feel it is wrong in theory, most people accept this practice because smoking has no benefits at all and a plethora of dire consequences. But now they are encroaching on food items. Sure candy, cheese and soda are not “necessities” themselves, but they are food items and food it absolutely a necessity. Ergo, where and when does the practice of using taxation to control behavior stop?

What I also find disturbing is the Danish government implementing contradictory policies, both of which cost us, the average Joe/Jane Q. Public, money. What I am referring to is the recent agreement with Germany to start collecting pant to, bl.a., incentivize Danes to shop in DK (http://www.cphpost.dk/news/international/89-international/46625-deposit-to-be-charged-on-german-cans.html). Yet now they have introduced a new tax which will incentivize us to shop in Germany for the same goods. Don’t believe me? Looks at these two quotes in comparison:

“...adding that the (pant/deposit) agreement will also even the playing field for Danish retailers. ‘So I expect it will result in less people going to Germany to shop”

vs.

“but one could wonder if it will have the desired effect when the price difference on candy and soda in Dnemark (not my typo), Germany and Sweden will be even greater”

Lastly, keep in mind that in a socialistic society, new taxes are generally easier to create then repeal (as opposed to a capitalistic society where the converse is true). This means that once a tax is here, it is here to stay for a good, long time. This new tax is already almost 3 times higher than the next European country with a similar tax, 2.78X to be exact.

At the risk of stereotyping, albeit partially in a positive light, I honestly admire and respect Danes as individual people. It's why I fell in love with one and why I am happy living here. They have good traditional values, work ethic, educations, etc, but I can’t understand for the life of me why average Danes have allowed their elected officials to treat them this way with taxation and have adopted the mindset of “Oh well, a new tax, that’s just the way it is, there’s nothing you can do about it…”
andrew!   |2009-11-06 23:56:25
I agree with JFD on there should be a line that taxation shouldn't cross. However, I don't see why "Taxation is the core of a country’s fiscal policy, it shouldn’t be used as a weapon for health policy, environmental policy, transportation policy, etc.". Things can be used for any purpose as long as it works!
chris   |2009-11-07 15:22:29
Has anyone else noticed that since the price of oil dropped, Denmark has instituted all these new, bizarre taxes, such as this one and the one on your buisness multimedia?
chethanht  - rediculous!!!!...agree   |2009-11-08 11:41:30
In that case why can't they reduce the taxes on healthy food?
In DK healthy food is expensive coz its healthy and unhealthy food is expensive coz its unhealthy. Only party who benefit from this is the state like many many tax rules.
deka  - When in doubt,,tax it!   |2009-11-10 19:21:06
Your absolutly right,,,, if the objective is to promote eating healty food, then it would make sense to reduce the tax on it. If the healthyfood is just as expensive as the unhealthy,,, seems the objective is defeated.
One of many examples is the auto industry,..it seems that taxing the import up to as much as 180% has not stopped people from buying them.
And yes it seems theres almost no limit to what can be taxed, or how much. And while one may argue that one gets many social benefits for them,, I beleive closer examination of surrounding european countries will show that they also have good benefits ,,,but absolutly lower taxes.

At this rate there will not be much new that can be taxed to fill the taxmans pockets....... so get ready, there is only one thing left.... tax the co2 that you produce.

You laugh,,,,,,, till it happens ; )
Thats one good reason to eat healthy ,,loose weight,,, youll pay less co2 tax.
deka  - When in doubt,,,tax it !   |2009-11-10 19:23:08
Your absolutly right,,,, if the objective is to promote eating healty food, then it would make sense to reduce the tax on it. If the healthyfood is just as expensive as the unhealthy,,, seems the objective is defeated.
One of many examples is the auto industry,..it seems that taxing the import up to as much as 180% has not stopped people from buying them.
And yes it seems theres almost no limit to what can be taxed, or how much. And while one may argue that one gets many social benefits for them,, I beleive closer examination of surrounding european countries will show that they also have good benefits ,,,but absolutly lower taxes.

At this rate there will not be much new that can be taxed to fill the taxmans pockets....... so get ready, there is only one thing left.... tax the co2 that you produce.

You laugh,,,,,,, till it happens ; )
Thats one good reason to eat healthy ,,loose weight,,, youll pay less co2 tax.
Shudak  - amazing   |2009-11-11 00:07:07
I still find it amazing a tax like this could be passed. As a Danish american who visits family in Denmark I am party to two opposing paradigms. In the US a tax like this would never even be considered because 1) we are fat and 2) it doesn't benefit big corporations.

Yes, tax should be lifted from healthy foods instead of hitting the bad harder, producing the same result with better means. But please be happy to have the ability to collectively come together to do something in the interest of all instead of for private interests (as is exclusively the case in the US)

tak
 

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