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Senate approves ‘Nutella’ tax on palm oil

Nutella and other similar spreads look set to become more expensive after a decision by the Senate this week.

Senate approves 'Nutella' tax on palm oil
Photo: Rainer Zenz

Members of the upper house voted 272 to 133 in favour of quadrupling the tax on palm oil, used in various spreads, biscuits and pastries.

The change to the tax law is known as the “Nutella amendment” since palm oil is one of the chief ingredients of the hazelnut flavoured chocolate spread.

The tax is expected to generate €40 million a year in revenue for the government, Le Figaro reported.

A past estimate suggested the tax would add six cents per kilogram to the price of Nutella.

“This tax is aimed at the producers, not the consumers, and aims to reduce the amount of palm oil they use in their products,” Yves Daudigny, the senator behind the proposal, said earlier.

Palm oil is seen as a contributor to obesity in the French population because of its widespread use in a range of food products.

The proposal, the first of its kind, harmonizes taxes on oils – currently, olive oil is taxed at  twice the rate of palm oil.

Nutella has been the target of critics who charge that it is not a nutritious food, contrary to past claims made by its producer.

In California, Ferero, the manufacturer of Nutella, faced a class action lawsuit which was settled earlier this year after the company agreed to change its labelling and certain marketing statements.

The suit alleged that Ferero misled consumers by promoting nutritional and health benefits of Nutella that were not accurate.

Health Minister Marisol Touraine opposed the “Nutella amendment” because she said the government did not want to multiply the number of “restrictive” tax assessments, Le Figaro said.

The Senate also overrode Touraine’s wishes by approving a tax on aspartame, an artifical sweetener that has been subject to controversy about its safety since its initial approval for use in food products by the US Food and Drug Administration in 1974.

Touraine, who was against the tax, said findings on the harmfulness of Aspartame are “not convergent” and it is necessary “to follow them up”.

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TAXES

Beskæftigelsesfradraget: What is Denmark’s employment allowance?

Denmark's government may soon announce changes to its tax reform plans, which will give all wage earners a bigger employment allowance. What is this and how will it affect foreigners' earnings?

Beskæftigelsesfradraget: What is Denmark's employment allowance?

What is the employment allowance? 

The Beskæftigelsesfradraget (from beskæftigelse, meaning employment, and fradrag, meaning rebate) was brought in by the centre-right Liberal Party back in 2004, the idea being that it would incentivise people to get off welfare and into a job.

Everyone whose employer pays Denmark’s 8 percent AM-bidrag, or arbejdsmarkedsbidrag, automatically receives beskæftigelsesfradraget. Unlike with some of Denmark’s tax rebates, there is no need to apply. The Danish Tax Agency simply exempts the first portion of your earnings from income taxes. 

In 2022, beskæftigelsesfradraget was set at 10.65 percent of income with a maximum rebate of 44,800 kroner. 

How did the government agree to change the employment allowance in its coalition deal? 

In Responsibility for Denmark, the coalition agreement between the Social Democrats, the Liberals and the Moderate Party, the new government said it would set aside 5 billion kroner for tax reforms.

Of this, 4 billion kroner was earmarked for increasing the employment allowance, with a further 0.3 billion going towards increasing an additional employment allowance for single parents.

According to the public broadcaster DR, the expectation was that this would increase the standard employment  allowance to 12.75 percent up to a maximum rebate of 53,600 kroner. 

How might this be further increased, according to Børsen? 

According to a report in the Børsen newspaper, the government now plans to set aside a further 1.75 billion kroner for tax reforms, of which nearly half — about 800 million kroner — will go towards a further increase to the employment allowance. 

The Danish Chamber of Commerce earlier this month released an analysis in which it argued that by raising removing all limits on the rebate for single parents and raising the maximum rebate for everone else by 20,300 kroner, the government could increase the labour supply by 4,850 people, more than double the 1,500 envisaged in the government agreement. 

According to the Børsen, the government estimates that its new extended allowance will increase the labour supply by 5,150 people.  

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