4 March 2020

The sugary drink tax in Poland

The sugary drink tax on products with high sugar content already exists, among others, in Canada, the USA, France, and Great Britain. The arguments behind the need to tax products that are harmful to health are based on the idea of prevention of sugar-related diseases and promotion of healthier nutrition habits.

The latest available statistics on the incidence of diabetes indicates that nearly 3.5 million Poles are struggling with diabetes. About 6% of the country’s population has been diagnosed, another 3% are considered undiagnosed but also affected.

According to the current version of the new law, the tax will apply not only to drinks with added sugar but also caffeine and taurine (and thus also popular energy drinks), alcohols sold in small bottles and dietary supplement advertisements.

Sugary drink tax in Poland – from when and to whom it applies?

The specific date when the new regulations will come into force is not yet known. We can expect that as soon as 2020, suppliers of sweetened beverages and other products covered by the new law will have to take into account additional business costs since they fall under the tax liability. The new law states that the tax liability arises once the covered products are moved or sold to a retail outlet.

The sugary drink tax rates

After the mentioned consultations from January 2020, the newly adopted form of taxation assumes a flat fee of 50 groszy per liter (sweetened drink; all products covered by the regulations) and a variable fee of 5 groszy per gram of sugar for all other products covered by the regulations, which contain more than 5 grams of sugar per 100ml. A separate category will cover products sweetened with a sweetener (an alternative to sugar) with a tax rate of 50 groszy per liter.

State budget revenues and financing

The government forecasts budget revenues at the level of about PLN 2 billion in the first year of the validity of regulations. In the first version of the law, the amount of impact was estimated at PLN 3 billion, but in recent weeks, after consultations of health department experts with industry representatives, the legislators decided to reduce the tax rate.

The Ministry has not yet disclosed the exact distribution of financing amounts but has informed that the greater part of the forecast amount will support the National Health Fund in the implementation of preventive and pro-health activities and the financing of health services directly related to diseases resulting from improper nutrition habits. The government also estimates that nearly 98% of the NFZ’s annual budget will result from the new tax.

The provision on the financing of sports and recreation activities suggests that part of the amount will also go to School Sports Clubs program – forecast 50 million zlotys in 2020 and even 100 million annually in subsequent years. The remaining part of budget revenues will go to communes and the Physical Culture Development Fund.

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