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Finland set to scrap tax on sweets and ice cream

By Nathan Gray+

30-Sep-2015
Last updated on 30-Sep-2015 at 14:50 GMT2015-09-30T14:50:50Z

Finland set to scrap tax on sweets and ice cream

The Finnish government has said a tax on sweets and ice cream in the country will be scrapped at the start of 2017 after the European Commission said the tax unfairly advantaged producers within the country.

Finland imposed the tax of 95 cents per kilo in 2011 in an effort to curb sugar consumption. The Finnish government said the tax is expected to bring in around €109 million this year .

But now the European Commission (EC) has told ministers that the tax system unfairly favours Finnish producers, because imported sweets have to pay it on top of import duties.

In informal proceedings, the Commission indicated that the current form of a tax incompatible with state aid rules – after two complaints were made over the tax.

As a result, the Finnish Cabinet Committee on Economic Policy decided that the tax should be removed at beginning in 2017.

The Taxpayers Association of Finland has worked out  that the changes will knock about 50 cents off a litre tub of ice cream, but it's not yet clear whether the savings will be passed on to customers.

"Any possible drop in price will depend from the industry and shops' pricing decisions," said Merja Sandell, a finance ministry official.

Finland taxes

Soft drinks have been taxed since 1940, while the tax on the production of candy was introduced in 2011 and extended to include ice cream.

Soft drinks technically include non-alcoholic drinks such as lemonades, energy drinks, flavoured water, various juices and fruit or vegetable beverages, but not milk.

According to the Finnish government, a tax on soft drinks will remain, however the scope of drinks categories that are subject to the soft drink tax is also set to be reviewed, while other products that may potentially be taxed are also being considered.

In addition to the €109 m received from the candy and ice cream tax this year, the older tax on soft drinks brought in €147 m.

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