The Irish government could raise over $300 million from a Fat Tax according to experts.

But overweight taxpayers can relax – the proposed tax is on saturated fat in food products.
The Irish Times reports that leadingeconomists were told of the potential tax returns at a meeting in Galway over the weekend.

They heard of the study which details how a separate tax for saturated fat, added sugar and salt could generate over $300 million a year for the Irish government.

The study was conducted by Maria Murray of Trinity College Dublin and Micheál Collins of the Nevin EconomicResearch Institute.

They told the seminar, attended byeconomists from government departments, that the direct effect on consumers would be quite small but the tax could lead suppliers to reduce fat and added sugar and salt in products.

They said: “The cash generated could be used for health promotion campaigns.

“There will be no effect other than revenue unless the government spends the revenue on generating change.”

The paper reports the tax on saturated fat would cost consumers an average of $1.25 cent a week, while added sugar would add $1.45 a week to weekly shopping costs. And the levy for added salt would be a humble 20 cents a week.

A tax on saturated fat alone could generate $110 million, while taxing added sugar could be worth up to $125 million with a salt tax yielding $17 million.

Read more news on Irish health.

The paper says that for individual consumers it would mean a 5 cent increase on a pack of butter, 5 cents on a half kilo of cheddar cheese, 5 cents on a chocolate bar and 8 cents on a two-litre bottle of cola.

The economists heard that such a tax would follow the example already set by New York state which recently introduced a levy on saturated fat.

They were told that Denmark imposed a tax on products with more than 2.3 per cent saturated fat last year while Hungary has introduced a salt levy.

Murray said Ireland’s Minister for HealthDr James Reilly had signalled his interest in introducing such a tax in December’s budget, since 61 per cent of Irish adults are overweight or obese and 20 per cent of children likewise.

She added that some 2,000 premature deaths occur annually, costing the State $5 billion a year.

Figures from 2003 show in-patient hospital costs for obesity-related illnesses were $40million.

Collins said: “It would not be a complicated tax. Either you have saturated fat or you don’t. If you do it is taxed at one level or another level.”