Denmark repeals fat tax, chooses tax free over fat free
Danish lawmakers have decided to lift their recently-established tax on fatty foods, citing criticism and effect on business as their reasons for repeal. Passed into law last year, the tax was placed on all foods with a saturated fat content higher than 2.3 percent.
The tax was established as part of a public health effort to curb obesity rates in the country. But some reports indicate that what it did in practice was drive people to other suppliers. Some shoppers began international grocery shopping--in Sweden and Germany--to purchase cheese and other high-fat dairy products at a lower cost.
Mette Gjerskov, Minister of Food, Agriculture and Fisheries said the fat tax, "is one of the most criticized we had in a long time." Due to the unpopularity of this law, Denmark also decided not to go forward with plans to institute a sugar tax.
The now-defunct tax raised $216 million in new revenue in the past year. As a result of repeal, Denmark will see an increase in income taxes and a reduction in deductibles to make up for the money lost. But they won't have to leave the country to stock up on ice cream any more.
[via NYT, WSJ, Washington Post]
Related on SmartPlanet:
This post was originally published on Smartplanet.com