Read the following article from RTÉ News (rte.ie) about the debate surrounding the introduction of a tax on sugar-sweetened drinks. Answer the accompanying questions.
WARNING BY OFFICIALS OVER IMPLICATIONS OF TAX ON SUGAR-SWEETENED DRINKS
Minister for Finance Michael Noonan was warned by officials in his department that the introduction of a tax on sugar-sweetened drinks could drive soft-drinks multinationals out of the State…
Prior to the budget in October, Minister for Health Leo Varadkar wrote to Minister Noonan urging him to bring in a 20% tax on sugar sweetened drinks as a means of tackling obesity.
1. Why was the idea of introducing a tax on sugar-sweetened drinks suggested?
The measure was never introduced. But the documents released to RTÉ News show that the Department of Finance was actively considering the proposal, and had done considerable research on its implications.
It found that a 25c increase on a litre of a commercial soft drink would add about 10c to the cost of a can of premium cola, and would raise an estimated €134m in additional tax for the State.
But the Department warned Mr Noonan that a reduction in consumption would hit soft-drink producers and small businesses and may also discourage large soft-drink multinationals from locating in the State.
2. In what ways might a tax on sugar-sweetened drinks affect the Irish economy?
