New Caledonia passes first sugar tax bill

Photo: Nouvelle Caledonie

New Caledonia’s Congress has endorsed, for the first time, a new “flexible” tax on sugar products.

The tax, in its initial stages, targets a first list of sugary food products.

During the Congress session on 21 November in Nouméa, the Bill was approved by 32 members with another 20 opposing the text.

The mover of the Bill, pro-independence politician Gilbert Tyuienon, is also the minister in charge of taxation within New Caledonia’s bipartisan government.

Defending the Bill, he said the idea of taxation on sugary products had been discussed since 2015 and that, since, there had been much consultation with stakeholders in order to fine-tune the implementation.

This has led to the tax applying now to both imported and locally-made products containing a significant sugar component, with varying rates according to the percentage of sugar contained in the product.

The most targeted products in the list are sugary soft drinks, ice-creams, confectionery, chocolate, but also sauces, cereals, biscuits, bakery and pastry items, all with different taxation rates.

It applies at the following rates: 20 French Pacific Francs (CFP, 0.18 US dollars) per kilogram or litre for items containing 5 to 9.99 percent of sugar, 40 French Pacific Francs (CFP, 0.36 US dollars) per kilogram or litre for items containing 10 to 29.99 percent of sugar, 60 French Pacific Francs (CFP, 0.55 US dollars) per kilogram or litre for items containing 30 to 39.99 percent of sugar and 85 French Pacific Francs (CFP, 0.77 US dollars) per kilogram or litre for items containing over 40 percent of sugar.

The new tax, described as “flexible”, is supposed to offer a response to alarming statistics, which reveal that about two thirds of New Caledonia’s 270,000-strong population is overweight and that eleven percent suffer from diabetes.

The situation also has a significant impact on New Caledonia’s public health and cost of medical care.

The revenue expected to be generated by the new tax is estimated by the government to some three billion French Pacific Francs (US$27.5 million). These new financial resources would be re-directed towards financing projects focusing on prevention and public awareness of the dangers related to high consumption of sugary products.