2021: Sugar tax comes into force

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Since January 2021, sugar tax comes into force. Its introduction has been postponed several times, most recently because of the coronavirus pandemic. The main aim of introducing this tax, as those in government are emphasising, is to combat the problem of obesity. However, there is speculation that it is about more revenue for the State Budget. What amounts are being talked about?

Sugar tax on “monkeys” and sweet drinks

Under the Act amending certain laws in connection with the promotion of pro-healthy consumer choices of February 2020, an additional tax will be imposed on alcoholic beverages up to 300 ml (so-called monkeys) and on beverages with sweetening or active substances added. The fees will be charged to traders who place products on the market. This concerns the sale of beverages to the first point of retail sale or the retail sale of beverages by the producer or entity purchasing such products as an intra-community delivery/importer. However, there is no doubt that these charges will be passed on to the consumer to a significant extent and will result in higher prices for these beverages.

The tax will be PLN 0,5 in the case of a sugar content of a drink equal to or less than 5 g in 100 ml of the drink, or in the case of a sweetener content of one or more sweeteners in any quantity, as referred to in Regulation No 1333/2008 (Union food additive regulation). For each gram of sugar above 5 g/100 ml an additional PLN 0,05 shall be charged. Beverages containing added caffeine or taurine will be subject to an additional charge of PLN 0,1 per litre of beverage. In total, the maximum amount of the charge will be PLN 1.2 per litre of beverage.

The new regulations also impose a fee on entrepreneurs selling alcoholic beverages not exceeding 300 ml (so-called monkeys). It is to be PLN 25 per each litre of 100% alcohol sold in packages of up to 300 ml. According to Arena Advisory, for example, this means PLN 1 for 100 ml of 40% vodka or PLN 2 for 200 ml of 40% “monkey” vodka.

NFZ main beneficiary of sugar tax

The main objective of introducing the tax, as argued by the Ministry of Health, is to promote healthy dietary choices and to improve the quality of the diet by reducing the amount of food not recommended for excessive consumption. The experience of other EU countries shows that such measures reduce consumption and thus contribute to reducing overweight and obesity in society. Additional taxes on sweetened drinks or fast food have been introduced by Denmark, Hungary, Portugal, France and the United Kingdom, among others.

Therefore, the lion’s share of revenue from the additional tax will go to the National Health Fund (NFZ). According to the Act, in the case of the tax on alcoholic beverages, this will be 50% of the collected funds (the remainder will be municipal income). As far as the additional fees on sweetened beverages are concerned, 96.5% of the collected fees will be transferred to the NFZ. In 2020, the total revenue from the sugar tax was estimated at PLN 2.3bn (assuming that it was to enter into force from April). Of this, PLN 2.1bn was to go to the NFZ.