Estonia: Parliament Approves Soft Drinks Tax
The Estonian Parliament has approved legislation taxing soft drinks to reduce sugar consumption, improve health and raise revenue. This initiative is based on the strong and growing international evidence that this measure is effective in settings where soft drink consumption is a significant contributor to sugar and energy intake. The decision was also informed by the joint work of WHO/Europe and the Ministry of Social Affairs to review the evidence and model policy options within the Estonian context.
In 2016–2017, the Ministry of Social Affairs and WHO/Europe collaborated on several projects, notably a modelling exercise exploring several possible tax scenarios. It showed that the tax would have the desired impact on purchasing and consumption, contribute to a reduction in obesity, and deliver health gains via reductions in cases of type 2 diabetes, ischaemic heart disease and stroke.
WHO/Europe supported a further review as part of the Evidence Informed Policy Network that examined the available evidence on policies to reduce sugar consumption.
What the tax covers
From January 1, 2018, the legislation will introduce a tax on nonalcoholic beverages (carbonated and noncarbonated drinks, 100% juice drinks and sweetened milk drinks), levied as follows.
- Products with only artificial sweeteners will have a tax rate of 10 euro cents per litre.
- Products with sugar content of 5–8 g per 100 ml will have a tax rate of 10 euro cents per litre.
- Products with sugar content of more than 8 g per 100 ml will have a tax rate of 30 euro cents per litre.
- Products with artificial sweeteners, sugar and sugar content of 5–8 g per 100 ml will have a tax rate of 20 euro cents per litre.
- Products with artificial sweeteners, sugar and sugar content of more than 8 g per 100 ml will have a tax rate 30 euro cents per litre.
The highest tax rate of 30 euro cents per litre will be introduced gradually. Starting in 2018, it will be reserved for products containing more than 10 g of sugar per 100 ml. In 2019 the threshold will move down to products with more than 9 g per 100 ml, and in 2020 to products with more than 8 g per 100 ml. The tiered tax gradient aims to stimulate product reformulation over time.
For 100% juice drinks and sweetened milk drinks, Estonia will ask permission to give them state aid from the European Commission. With this permission, these products will be freed from the tax.
This is a commendable step forward in tackling obesity in Estonia and is consistent with international guidance from WHO,” said Dr Marge Reinap, Head of the WHO Country Office in Estonia, when the legislation passed through Parliament on 19 June 2017.
The adoption of this measure is a show of the Government’s commitment to promote healthy diets, tackle obesity and improve health in the long run. We hope that Estonia continues along this path with implementation of other efficient measures to halt the rise in obesity.”