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November 12, 2012

DENMARK: Fat tax to be scrapped next year

The Danish government has confirmed the country's controversial fat tax will be withdrawn in January.

By Dean Best

The Danish government has confirmed the country’s controversial fat tax will be withdrawn in January.

Denmark’s tax on saturated fat will be removed on 1 January, the country’s government confirmed to just-food today (12 November).

The Danish government has said last month it intended to scrap the levy, which was introduced last year by the country’s previous administration.

The tax, set at DKK16 per kg of saturated fat, was introduced to try to combat obesity and ill-health in Denmark.

However, the levy drew criticism from the country’s food manufacturers, which questioned whether it would change consumer behaviour.

In a statement today, the Danish government said the removal of the tax would lead to a loss in revenue of DKK1.18bn. However, it said the levy had caused “a number of technical and legal problems” and suggested the cost of the tax was not offset by the “limited” benefit to health.

“The fat tax has given rise to a number of legal and technical problems and led to harsh criticism from the business community and others,” the government said. The primary factors behind that criticism is that the tax affects low-income groups hardest, hits business competitiveness through a significant administrative burden and increases cross-border trade.” Critics, the governnment said, had argued the tax could hit jobs.

It added: “It is estimated that the cost of fat tax is not commensurate with the limited positive health effects of fat tax.”

The Danish government also said it would cancel plans to introduce a tax on sugar.

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