Planned sugar tax causes conflict in the coalition

The planned sugar tax is causing new conflict in the coalition. On Thursday, the Federal Chancellery ensured that the departmental vote on the draft bill from the Federal Ministry of Finance was stopped. In coalition circles, this was justified by the lack of early coordination.

It is actually common practice for each ministry to discuss a project with the Chancellery until there is a consensus. Only then will the other houses be formally included. Federal Finance Minister Lars Klingbeil (SPD) is now said to have moved ahead with the planned tax on sugary drinks. At least that's what it was said in Union circles. Even before, when it was only about the key points of the law, the experts in the ministry and the Chancellery were said to have disagreed.

A key stumbling block: Klingbeil designed the tax in such a way that he can expect revenue of almost 800 million euros next year. In the following years it should be around 1.2 billion euros. In doing so, he has gone far beyond what the Health Finance Commission had suggested. The tax she proposes on sugar-sweetened drinks should bring in annual revenue of around 450 million euros. The money was originally intended to benefit statutory health insurance. There was consensus in the coalition that this would become a tax.

Klingbeil also justified the planned tax with health policy considerations. The draft bill, which has now been stopped, refers to the World Health Organization (WHO), according to whose recommendation the intake of free sugars should be limited to less than ten percent, ideally less than five percent, of the daily energy intake. That would be around 25 to 50 grams per day. “In Germany, this value is significantly exceeded for both adults and children,” it says.

A significant proportion of sugar intake comes from sweetened drinks, whose per capita consumption in Germany is around 90 to 100 liters per year. These are nutritionally unnecessary and promote increased energy intake due to the low satiety effect of liquid sugar. Consumption leads to an increase in body weight and is associated with an increased risk of illness, tooth decay and mortality. “The annual associated gross care costs for the health system due to the increased consumption of sugary drinks are estimated at around 3.5 billion euros.”

One tax, two goals

The new consumption tax prepared by Klingbeil's people has a dual purpose. On the one hand, the aim is to generate additional revenue for the federal budget. On the other hand, the black-red coalition wants to create incentives to reduce the total sugar content in sugary drinks. The two intentions compete with each other. The sooner the second goal is achieved, the lower the income for the federal government will be. He alone would benefit from the new tax. Because the states and municipalities are not affected by this, the coalition does not have to rely on the approval of the states in the Bundesrat when it comes to legislation. Some CDU-led states have already expressed skepticism about the plan. If they find enough supporters, they could delay the tax, but they cannot prevent the law.

The 57-page bill regulates exactly what should be taxed - and what should not. “The tax area is the area of ​​the Federal Republic of Germany without the Büsingen area and without the island of Helgoland.” It further stipulates: “The subject of the tax is sweetened drinks and certain goods intended for the production of sweetened drinks, provided that the relevant total sugar content is at least 5 grams per 100 milliliters.” It is also clarified: “If the sugar drinks tax arises again when mixing goods that have already been taxed, the finished product will not be taxed again.”

Consumers should bear the new tax. “The law is expected to have a direct impact on individual prices, the general price level or the consumer price level,” the draft law explicitly states. “The design of the sugar drinks tax as a consumption tax is designed to ensure that those liable to pay the tax pass on the burden to the end customer.”

Pure fruit and vegetable juices that do not contain any added sugar are also excluded. They should not be taxed solely because of their natural sugar content. “The same applies to spritzers that are made from pure fruit juice or fruit juice concentrate and water with carbon dioxide and to which no sugar has been added.” Non-alcoholic wine, non-alcoholic sparkling wine and non-alcoholic beers are also exempt from the sugary drinks tax. Also: soy drinks, drinks made from nuts, seeds and grains and drinks containing milk fat.

Diplomats and their children will continue to drink cola tax-free

In a separate paragraph on almost a page it is stipulated that embassies and consular missions are exempt from the tax on sweetened drinks "under the condition of reciprocity", "except consulates of choice". It is further clarified in detail that “the heads of the missions mentioned in number 1, their diplomatic members, consular officials, members of their administrative and technical staff and their official domestic staff as well as the family members of these persons” are benefited in their consumption.

That's not all, it is further clarified: "Family members within the meaning of this provision are the spouse or life partner, the unmarried children or children not living in a life partnership and the parents if they are economically dependent on these people and live in their household." It is also clarified who will not benefit in this context: Germans or those stateless people and foreigners who already have their permanent residence in Germany and people who are privately employed in this country.