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Tax reduced on foodstuffs with low added sugar content

Can it: the Government has tweaked its controversial sugar tax laws (Photograph supplied)

The Government has made some minor adjustments to its controversial sugar tax by reducing duty on some low-sugar items.

David Burt, the Premier and Minister of Finance, unveiled the measures during the second reading of the Customs Tariff Amendment Act 2023 in the House of Assembly on Monday night.

The tax on products containing sugar was introduced by the Government in October 2018 as a weapon in the war on diabetes. It was hoped that higher prices would deter residents from consuming sugary drinks.

Mr Burt said that, under current laws, products containing low amounts of sugar were being charged the same 75 per cent duty rate as high-sugar items.

For example, Mr Burt said that drinks containing less than five grams of added sugar per 100ml will now be charged at a 25 per cent duty rate.

Mr Burt said the changes would “ensure that the 75 per cent sugar tax is focused on sodas, drinks and other food goods such as candy and chocolate”.

“This Bill proposes to reduce the duty rate applicable to selected items that have a relatively small amount of added sugar,” he said.

Mr Burt pointed out that Bermuda had “one of the highest rates of non-communicable diseases on the planet”.

He added: “There is no doubt that sugars are a main contributor to that. Health officials have warned our community that added sugar to our diets can contribute self-inflicted health problems such as obesity, type 2 diabetes and heart disease.

“For this reason, taxes on high-sugary drinks and foods is something that is considered a sound public policy response, so the Government will continue to make sure that we leverage this on items of moderate to high levels of added sugar.

“But it should not apply across the board to anything with any amount of added sugar in it.”

According to the opposition One Bermuda Alliance, the changes did not go far enough.

Saying Mr Burt was “heading in the right direction“, Cole Simons, the leader of the OBA, said: ”We felt sugar tax is a money-grab initiative for the Government during difficult times.“

He also questioned why income raised from the tax increases had not been spent on health education programmes.

Scott Pearman, the OBA spokesman on home affairs, went farther.

He said: “Here we are with one of the most hated PLP policies ever — the stealth tax, the sugar tax — which makes every bit of food around here more expensive and for people to be unable to afford things, and what are we doing?

“The Premier’s heard the people — everybody hates the sugar tax — but does he get rid of it? No. The sugar tax needs to go. You should go all the way. Why? Because leaders need to be bold. They need to take tough decisions.”

The amendment will also provide customs duty relief for owners of gyms, barber shops, beauty salons and other personal care businesses who want to upgrade their facilities.

Retailers who import school and national sports team uniforms will be exempted from customs duty as will importers of aggregate, which is in short supply on the island.

The changes, which will come into effect next month, were backed by the Opposition.

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Published March 15, 2023 at 7:52 am (Updated March 15, 2023 at 7:52 am)

Tax reduced on foodstuffs with low added sugar content

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