Review of sugar tax deficiencies’ launched
Government is to review how the sugar tax was implemented over concerns that retailers had spread the impact of the tax across other items.
Curtis Dickinson, the Minister of Finance, told the House of Assembly: “We need to have a look at this again.
“The policy intention I don’t disagree with; my challenge is around the application of the policy.”
He told the House the cost to import sugar-laden goods had increased, but that it appeared there had not been a similar increase in the cost of the items on the shelves.
Mr Dickinson said: “If there’s a chocolate that costs a dollar, it should now cost $1.75 because of the sugar tax. You don’t see chocolates costing $1.75.
“I think what’s happening is retailers are paying the tax at the point of entry and then deciding to take that burden and share it across the basket of goods that they sell.
“That wasn’t the policy. The policy was to apply it to specific items, and I think that’s probably where this has kind of gone sideways.”
He said the Ministry planned to examine how the tax was applied.
Mr Dickinson added: “Is it a cumbersome exercise? It can be, but I think it’s a better answer than applying tax to everything when that isn’t the intention of the legislation.
“It needs to be looked at with a view towards addressing any deficiencies about how the tax is applied.”
The first phase of the sugar tax was introduced in October 2018, with increased duty on sugar, sweets and sweetened drinks to 50 per cent.
Government reduced duty rates on some items, including produce and bottled water, at the same time.
Duty on sugary products increased again in April 2019 to 75 per cent and chocolate and cocoa products were added to the list of taxable items.
The duty hike was designed to cut the rates of diabetes and obesity, with the revenue generated to be used for health and education.
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