Portugal plans tax attack on salty snacks in 2018

By Gill Hyslop

- Last updated on GMT

The Portuguese government is proposing a new salt tax next year, on top of its sugar and alcohol taxes. Pic: ©GettyImages/SeanPavonePhoto
The Portuguese government is proposing a new salt tax next year, on top of its sugar and alcohol taxes. Pic: ©GettyImages/SeanPavonePhoto

Related tags Tax Nutrition

Portugal’s State Budget proposal for 2018 proposes a new tax on foods that have a high salt content – including potato chips, cereals and crackers – in an effort to curb the nation’s unhealthy consumption patterns.

An increase of €0.80 ($0.94) per kilo will be levied on products that have a salt content of 1 g or more per 100 g of product or 10 g per kilo.

Packaged salty foods containing less than this limit will be exempt.

The move follows the government’s introduction of sugar tax on sugary drinks in January this year.

The price of beverages with up to 80 g of sugar per litre rose by €0.15 ($0.17), while those with more than 80 g of sugar per litre cost an additional €0.30 ($0.35).

In pursuit of health and wealth

The approved draft of the 2018 Budget (OE2018) proposes changes in taxes in “the pursuit of health promotion and disease prevention”.

It’s also designed to narrow the country’s budget deficit to 1% of gross domestic product (GDP) for the fifth consecutive year in 2018, according to Minister of Finance, Mário Centeno.

The debt ratio is forecast to drop from 126.2% of GDP in 2017 to 123.5% of GDP in 2018.

Bittersweet earnings

The new salt tax is forecast to raise €30m ($35m) in 2018, while the sugar tax for beverages is expected to raise €80m ($94m) in State revenue this year and will be increased by up to 1,5% depending on their sugar level.

Taxes on alcoholic beverages are also set to rise next year on top of this year’s 3% increase - by 1.5% for beer and by 1.4% for spirits, liqueurs and sparkling wines.

The tax on high-salt foods should come into effect in July 2018, and will be added to the Consumer Excise Code (IEC) and revenues.

This will be the third budget of the Portuguese Socialist Government, which has a minority in Parliament and needs the support of the Marxist Left Bloc and the Portuguese Communist Party for the proposal to go ahead.

The final vote on the 2018 State Budget will be on November 28.

No grounds: Industry comments

Commenting on the planned tax that would affect his sector, European Snacks Association director general Sebastian Emig told BakeryandSnacks: "The European savoury snack Ssctor recognises that obesity and NCDs are important and complex societal issues that are due to a multitude of factors including changing lifestyles, reduction in physical exercise, unbalanced diets and a lack of nutritional understanding/education.

"In our opinion, there are no grounds for the discriminatory treatment of savoury snacks as they are a minor contributor of salt to the daily diet.

"Furthermore, there is no scientific or empirical evidence that discriminatory food taxes would reduce obesity rates and/or improve public health; on the contrary, substitution effects are likely to occur,"​ said Emig.

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