Directorate of Health Proposes 20% Sugar Tax Skip to content
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Directorate of Health Proposes 20% Sugar Tax

The Directorate’s new action plan calls for imposing a 20% sugar tax on soft drinks and sweets, RÚV reports. Kjartann Hreinn Njálsson, assistant to the Director of Health, says that implementing this tax is important for the country’s long term goals in public health.

Ireland, France, Norway, and Mexico, are just a few of the countries which have taxed soft drinks and other sugary products mostly in an effort to reduce their consumption and improve public health. Iceland also previously implemented a sugar tax of 5% that was eventually repealed.

Higher tax more likely to succeed

“When this was last tried [in Iceland], sweetened soft drinks rose in price by only around ISK 5 per litre, while chocolate lowered in price because the existing taxes that applied before were higher than those applied due to sugar,” states Kjartann. “Now it is suggested that the increase be 20% […] so that consumers feel the increase.” Kjartan says there is evidence that informing consumers and encouraging healthier choices are not enough to decrease sugar consumption. Lowering the price of healthy food products needs to follow as well.

“Given how high the level of sugar consumption is here in the country and what a serious public health issue it is to consume too much sugar, for society as a whole, we believe the sugar tax is very important,” stated Kjartan.

Taxing TVs and running shoes

Several parties have put forth arguments against the sugar tax, questioning its efficacy and pointing to potential negative side effects. Icelandic Federation of Trade Director Ólafur Stephensen has suggested that the tax works against recent efforts which have streamlined food taxation, and would increase overhead costs for businesses. In addition, he points out that research on sugar taxes around the world has shown contradictory results and there are many indications such taxes are ineffective.

The sugar tax is also paternalistic, Ólafur adds. “It’s so incredibly difficult when governments are starting to decide what is healthy and what is unhealthy for us and change the price of things in order to control consumption. If taxes are to be applied to this end then there should be high taxes on TVs and low taxes on running shoes.”

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