The Slovenian Government and its coalition partners have decided to withdraw the proposed excise duty on sugary drinks from the 2015 budget proposal.
The government had hoped to secure €4.7 million per year through a tax on drinks with added sugar or sweeteners, but faced fierce opposition from businesses, especially the food and drinks sector.
The Prime Minister's office would not specify which measures remain on the table or how it will substitute those scrapped, saying only that the coalition parties agreed on the supplementary budget for 2015.
In early December, Slovenia's Finance Ministry published a draft bill on taxation of sugary drinks, under which excise duties would be imposed on non-alcoholic beverages with more than 10 grams of sugar per litre. The duty, which had been projected to increase prices by up to 10 per cent, was planned to be charged on the retail price.
During a parliamentary debate, representatives of the sector warned that a new taxation would lead to layoffs and force manufacturers to relocate production outside the country. Mineral water and fruit drinks maker Dana issued a dire warning about the effects of the tax on sugary drinks on its operations, saying that it faced a 15 per cent drop in sales if it transferred the tax to consumers.
The medical profession regrets the decision on abandoning the excise duty on soft drinks because of their bad effect on health, such as obesity, diabetes and tooth decay, although the Slovenian Chamber of Commerce welcomed the withdrawal of "the additional burden on the economy".
Slovenia's budget deficit in the currently valid proposal is planned at 2.4 per cent of GDP, but Finance Minister Dušan Mramor warned in early October that it could increase to 5 per cent of GDP unless extra measures were taken.
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