Plans to introduce a tax on sugary soft drinks in the Isle of Man have been deferred by one year to 1 April 2019.
The British Crown dependency said that the levy could not be effected this year due to a change in UK legislation.
In the face of the costs for both business and the government of introducing a standalone soft drinks levy in the Isle of Man, the tax will be deferred to be introduced as a shared duty with the UK.
The UK’s soft drinks tax, which was announced in 2016, will still be introduced on 1 April 2018. There will be two tax bands – one for sugar content above 5g/100ml and a second higher band for sugar content above 8g/100ml.
It will only be applied to water-based soft drinks, meaning that milk-based beverages and pure fruit juices are exempt.
This week, the Isle of Man government announced that since the soft drinks levy was first announced, the drinks industry has reformulated many products to reduce sugar content. This will, it said, “result in much lower” revenue from the tax than the £1 million originally anticipated.
It added that it will keep its promise to invest £100,000 as well as all money from the tax into public health programmes aimed at reducing childhood obesity and encouraging physical activity and balanced diets.
A report publish last year by the UK’s Office of Budget Responsibility stated that the amount the UK government can expect to raise from its levy will be £245 million less than the predicted £520 million.
Ireland, the Philippines, South Africa and Estonia also are due to implement sugar taxes this year, and in Bermuda a public consultation on a proposed levy is due to end next week.
Figures from Portugal’s health ministry have revealed that consumers in the country cut their sugar intake by “5,500 tonnes in 2017” after the introduction of a sugar tax at the beginning of the year.
Last month, Coca-Cola revealed that it will shrink its 1.75-litre bottles and raise prices in the UK in response to the impending sugar tax.
© FoodBev Media Ltd 2024