Budget 2025: Healthy Choices Left On the Back Burner
In Budget 2025, Ireland’s Finance Minister Jack Chambers passed on a number of opportunities to increase taxes on unhealthy products, prioritizing a €1 increase on cigarettes above all else. While public health concerns were raised regarding the consumption of sugar-laden drinks and the potential impact of increased betting tax, these issues were ultimately not addressed in the budget.
Sugary Drinks Left Untaxed
The Department of Health had strongly urged a 27% increase in the tax on sugary drinks, citing a surge in energy drink sales and rising public health concerns. While acknowledging that manufacturers had reduced sugar levels in some drinks, the department highlighted the growing demand for unhealthy energy drinks, raising anxieties about high sugar and caffeine intake. A submission prepared for Minister Chambers emphasized the need to address these concerns and mentioned that the sugar tax generated approximately €30 million annually, contributing to a decrease in sugar consumption.
However, the department also expressed concern over the rise in sugar drink consumption, which jumped from 30 million litres in 2020 to 40 million litres in 2023. Additionally, they acknowledged that the differential pricing intended to discourage sugary drink purchases was being undermined by many retailers setting the same prices for sugary and diet versions.
Betting Tax Increase Deemed Too Risky
Despite considering potential increases in betting tax, which could have generated between €12 million and €25 million annually, Minister Chambers ultimately decided against any change. While the government acknowledged the concerns raised by small bookmakers who warned of potential closures, they also pointed towards the “overall sectoral shift towards online betting”, making it difficult to ascertain the true impact of an increased tax
BoyleSports, a major player in the industry, expressed strong opposition to any tax increase, claiming it would have a “very detrimental impact” on the entire sector.
Black Market Concerns Remain
While Civil servants had proposed a €1 increase in cigarette duty, emphasizing the need to combat the “old reliables”, concerns were raised about a potential shift towards the black market. A submission stated that: “[Research shows] notable increases in the volume of products being consumed outside the scope of Irish excise duty. [This] raises concerns that price increases may be creating greater incentive for black market activity.”
In addition to cigarettes, the duty on alcohol was left untouched, with officials citing the existing high taxes on alcohol in the European Union.
Mixed Reactions to Budget 2025
Public health lobbyists criticized the absence of any tax increases on unhealthy products, arguing that it undermined public health objectives. They pointed out the lack of general increases in duties for a decade, leading to a real-term decrease in excise duty revenue since 2013. In contrast, representatives from the drinks and pub industry welcomed the lack of changes, stating that their members had already been hard hit by rising costs, including sick leave obligations and minimum wage increases.
Reporting by Ken Foxe
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