Bermuda’s new sugar tax will be introduced in stages after a backlash from businesses, the House of Assembly heard yesterday.
The 75 per cent tax, scheduled to begin at the start of this month, was criticised by soft drinks producers — and the modified legislation gives local businesses such as bakeries a break from the top tariff.
The Bill, brought to Parliament by health minister Kim Wilson, now proposes a new duty rate of 50 per cent on sugar to start on October 1.
The 75 per cent tax rate will be introduced in April 2019.
The legislation, passed yesterday by MPs, was designed to target sugary drinks and sweets, including powdered drinks — but diet sodas have now been given a reprieve.
Some businesses claimed the tax on high-sugar sweet products would hit their profits and encourage shoppers to buy “even worse food alternatives” than home-made, baked goods.
Ms Wilson said that the changes were adopted after further consultation and feedback.
She added that the “phased implementation does not detract from this government’s determination and commitment to this progressive step”.
Ms Wilson told the House that similar legislation elsewhere had been shown to reduce consumption of sugar-laden sodas and other products that cause major health problems such as diabetes and obesity.
She said: “I can’t emphasise enough that these preventable diseases are crippling our country physically and financially.”
A survey in Bermuda found that 52 per cent of respondents supported the tax, with 44 per cent against.
Ms Wilson said prices in stores would not go up by 75 per cent as a result of the tax. But prices could increase by 20 to 50 per cent for island-made foods, with bread possibly going up 5 per cent and bakery items by 15 per cent.
Ms Wilson said the cost of fudge, which she said was “almost 100 per cent sugar”, could go up by 50 per cent.
However, another amendment proposed a concessionary rate scheme for island-based food makers.
Ms Wilson said taxes would be proposed for chocolate, at present not included in the legislation, at a later date.