In a move that would certainly have some gasping (including Michael Bloomberg, the New York Mayor), Denmark has decided to repeal its country’s tax on sodas and beer. The soda tax will be cut in half in July and then eliminated entirely next year.
Their current tax of 52 cents for a 1.5 liter bottle has caused Danes to travel across the border to Germany to buy their soda. Finance Minister Bjarne Corydon told public broadcaster DR that the tax’s repeal would help with a “powerful growth spurt” to the Danish economy. Last year, a report commissioned by the Danish grocers’ association DSK found that 57% of Danish households have crossed the border to Germany to get their beer and soft drinks in the last year.
The soda tax is part of Prime Minister Helle Thorning-Schmidt’s larger plan to move the Danish economy into the spotlight of competitiveness. She plans to cut the local business tax and tax credits for apartment and home renovations as well. She also plans to reduce the state aid offered to university students – at least they will have tax free soda to drink.