The Danish government presented its finance act for 2013 on 11 November 2012. According to the act, the government will repeal a highly debated legislation which imposes a tax on food containing more than 2.3% saturated fat the so-called “fat tax”.
The “fat tax” came into effect in October 2011 with the official purpose of improving the health of the Danish population curbing obesity rates in the country in particular .
However, this purpose sparked much debate in the national media with opponents claiming that the actual aim of the tax was to generate more income for the state. Criticism was not dampened when on 18 September 2012, the national parliament of Denmark decided to increase the “fat tax” about 15 percent.
Another point of came from the Danish companies who had to administer the tax. For them the surcharge imposed a major administrative burden as it had to be calculated on every single food item. In addition to this, many retailers found it difficult to determine the exact amount of fat in some foreign products
As a consequence, the Danish government has changed its view on the “fat tax” and had decided to repeal it with the upcoming finance act for 2013. In the act, the government states that one of the strongest arguments for repealing the tax is concern about increased consumer prices. Furthermore, the government has taken the increased administration work for among Danish companies into consideration as it fears the extra burden may cause layoffs.
The government has not yet revealed when the tax will be abolished.