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New taxes on sugar and food supplements advertising to be introduced in Poland

In December 2019, the Ministry of Health presented draft regulations introducing new taxes on drinks with added sugar and sweeteners, energy drinks and alcoholic beverages sold in small bottles. There are also plans to introduce taxes on the advertising of food supplements.

The regulations are due to enter into force in April 2020.

The so-called sugar tax is to be set at the level of PLN 0.70 or PLN 0.80 for each litre of sweetened drink and the tax on energy drinks is to be set at the level of PLN 0.20 per litre. The costs of the sugar tax are to be borne by producers and importers, while sellers of alcoholic beverages will pay PLN 1 for every bottle they sell that has a capacity of less than 300 ml.

The draft bill also proposes that any new tax on the advertising of food supplements be introduced and that entities providing services related to the advertising of food supplements be made to pay a fee equal to 10% of the VAT base resulting from this service. The revenues obtained by the state from these taxes are to be paid to the National Health Fund and will finance healthcare services.

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Positive impact on public health?

According to the Ministry, the new regulations are aimed at promoting healthy consumer choices. However, the food supplements industry disagrees with its products being treated on a par with sweetened drinks and alcohol, as they actually  have a beneficial effect on human health. It seems that the new regulations are rather fiscal in nature and not primarily aimed at improving public health.

Taxing the advertising of food supplements does not appear to have a positive impact on public health, and what is more, the specific solutions presented in the draft may actually infringe EU tax legislation. Indeed, such tax is also unusual from the international perspective - while a number of countries (e.g. the United Kingdom, France, Portugal, Finland and Norway) have decided to introduce a sugar tax, the taxing of dietary supplements is unprecedented. In fact, such products often benefit from preferential tax treatment, e.g. a reduced VAT rate.

The draft is currently at the public consultation stage and has been strongly criticised by industry associations and experts. Therefore, it may still be subject to changes.

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