The controversial duty on sugar which the government and Red Greens have agreed to introduce from January 1, 2013 appears to be on its way out, sources tell Politiken.

The business community in particular has issued persistent warnings throughout 2012 against introducing the duty, which has been designed to create annual revenues to the state of some DKK1.3billion.

”For us, the main idea has not just been to rake in a billion kroner from producers and consumers, but that the duty has an effect on health. I have difficulty seeing that the right model is available,” says Social Liberal Tax Spokesman Nadeem Farooq.

“I expect the Tax Minister to raise the issue in cabinet so we can find the financing to bury the sugar duty,” he says, but declines to say where he expects financing to come from.

Tax Minister Thor Möger Pedersen suggested three weeks ago that both the sugar duty and a duty on fats that was introduced by the previous government were perhaps up for discussion.

According to Politiken’s information the government is close to realising that the sugar duty is difficult to introduce in practice.

Having failed to find an acceptable model it appears the idea is to be dropped.

Such a decision, however, opens up a political discussion on how to finance the shortfall left by axing the sugar duty.

FACEBOOK – Follow Politiken’s News in English