Chancellery stops Klingbeil's draft sugar tax

Klingbeil only sent his plans to the ministries for coordination on Wednesday. However, according to government circles, the draft is not capable of gaining a majority.

Berlin. The Chancellery is stopping the draft law by Finance Minister and Vice Chancellor Lars Klingbeil (SPD) to introduce a sugar tax. The Handelsblatt learned this from government circles.

Klingbeil only sent his plans to the ministries for coordination on Wednesday. In government circles it is now said that his draft deviates from the proposal of the Health Finance Commission “and in this form is not capable of gaining a majority in the government”. There was initially no comment from the Ministry of Finance.

With the sugar tax, Klingbeil not only wants to generate income for the federal budget, but also give beverage manufacturers an incentive to reduce sugar content and make their products healthier. According to the draft, it should apply to all drinks with a sugar content of five grams per 100 milliliters.

The Chancellery has stopped the draft bill to introduce a sugar tax for the time being. (symbol image)

Contrary to what has been previously considered, there should be no sugar tax on zero drinks that are sweetened with substitutes. Pure fruit and vegetable juices, non-alcoholic beer and non-alcoholic wine were also excluded. The amount of the tax should depend on the sugar content and should be between 26 and 38 cents per liter.

According to the draft, the tax should apply from July 1, 2027. The Ministry of Finance expected annual revenues of around one billion euros. Specifically: 945 million euros in the coming year, then 1.155 billion euros in the second year. By 2031, revenue is expected to rise to 1.18 billion.

However, there has been resistance so far, especially in the Union faction. Several federal states also reject the sugar tax. Hesse's Prime Minister Boris Rhein (CDU) described it as a "burden for medium-sized beverage manufacturers". There were also immediately critical voices from business.