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Panimoliitto: Competition-skewing excise tax on soft drinks should be abolished

The government’s proposal to increase the excise tax on soft drinks is extremely problematic. The proposed rate is double the current tax and five times the rate of three years ago. It shifts demand to untaxed products, reduces the growth potential of companies liable to taxation, and weakens employment in Finland. The soft drinks tax was last increased in both 2012 and 2011.

According to the proposal, the soft drinks excise tax would be split into two brackets. The excise tax on soft drinks containing sugar would be raised to 22 cents per litre, while the tax on sugar-free beverages would remain at 11 cents per litre. The limit for sugar content, 0.5% sugar, is so strict that, for example, many health and wellness waters fall into the higher tax bracket.

“It’s unfair to impose differential taxes on a single product group, as it will further increase the workload of the companies liable to taxation. It is also tough on the companies that are being singled out. Denmark, for example, has experimented with differential taxation on soft drinks, but this problematic tax is now being completely abolished due to an explosion in cross-border trade,” says Elina Ussa, Managing Director of the Federation of the Brewing and Soft Drinks Industry.

The Federation of the Brewing and Soft Drinks Industry proposes that instead of imposing excise taxes on individual product groups, the government should either develop a broad-based tax based on sugar content or manage taxation through VAT. It should be remembered that taxation must always be fair and based on objective and rational grounds.

The Finnish Food and Drink Industries’ Federation considers untaxed products as receiving illegal support from the State. The Federation has therefore filed a complaint with the commission about the taxation of confectionary, ice cream and soft drinks.

Excise tax will not solve challenges in public health

The only nation in Western Europe that drinks fewer soft drinks than Finland is France. Total consumption in Finland is slightly below 60 litres of soft drinks per person.

The proposal refers to the health-promoting effects of the tax, but in accordance with its definition in tariff nomenclature, the excise tax is randomly imposed on certain products while leaving nutritionally similar products untaxed. Nowadays, the soft drinks tax is even paid on mineral waters. Public health challenges associated with nutrition are not the result of a single product, but a consequence of overall diet and lifestyle. It is therefore discriminatory to quote public health as a reason for levelling a tax at soft drinks alone.

“A narrow-based tax will not have any visible effects on public health. On the other hand, a flat tax would punish low-income families in particular,” says Ussa.

Multi-year decline in the soft drinks market continues

Sales of soft drinks by Federation member companies fell by just over 10 million litres in 2012, which represents about 4.1 per cent of Finland’s volume. 2012 saw the greatest contraction in sales since 2004, when total sales of soft drinks first took a downswing. This decline in the market has also continued during 2013. However, soft drink imports into Finland have grown steadily over the past few years. Imports account for just over 20 per cent of soft drink consumption in Finland.

“The danger is that soft drink imports from low-cost countries will further increase and domestic production will decrease. This will have an impact on both profitability and employment in the industry,” says Ussa.

NSN’s new name spells business as usual for mobile broadband powerhouse

  • Telecoms networks specialist reaffirms focus on mobile broadband
  • NSN sees rebranding as next chapter in transformation story
  • Ownership change brings further stability, clarity and confidence in the future
Nokia Siemens Networks, the world’s mobile broadband specialist, today becomes Nokia Solutions and Networks and is now known as NSN. The new name reflects NSN’s change of ownership following Nokia’s acquisition of Siemens’ entire 50 percent stake, which was announced on July 1, 2013, and completed today. Nokia Solutions and Networks is wholly owned by Nokia and will continue to be consolidated by Nokia. As announced by Nokia, Rajeev Suri will continue as CEO and the NSN Executive Board will remain unchanged as a result of the transaction. Unveiling the new name, NSN renewed its commitment to driving leadership in the mobile broadband sector and to operating as a more independent entity.
“While our name and brand have changed, I would like to emphasize that our overall strategy and our focus on mobile broadband remain the same,” said Rajeev Suri, CEO of NSN. “Our customers will not notice any difference in our unstinting commitment to delivering superior technology and services across the world. Today’s announcement is, however, an exciting new chapter in our transformation story.”
When announcing the transaction, Nokia stated its intention to “continue to strengthen the company as a more independent entity”. NSN, therefore, sees continuity and stability as major goals in the change of ownership, and is committed to pressing on with its strategy.
NSN’s strong profitability, shown in Nokia’s Q2 results published on July 18, 2013, is testament to the success of that strategy and the increased efficiency of the company. As already reported by Nokia, NSN has delivered four consecutive quarters of strong profitability, positioning the company well for strong long-term leadership in the industry. The turnaround strategy, announced in November 2011, is therefore delivering solid results
NSN’s goal remains to develop profitable businesses with customers worldwide, deploying the ever-growing possibilities of universal connectivity and content.
To share your thoughts on the topic, join the discussion with @NSNtweets on Twitter using #NSNnews.
About NSN
Nokia Solutions and Networks is the world’s specialist in mobile broadband. From the first ever call on GSM, to the first call on LTE, we operate at the forefront of each generation of mobile technology. Our global experts invent the new capabilities our customers need in their networks. We provide the world’s most efficient mobile networks, the intelligence to maximize the value of those networks, and the services to make it all work seamlessly.
With headquarters in Espoo, Finland, we operate in over 120 countries and had net sales of approximately 13.4 billion euros in 2012. NSN is wholly owned by Nokia Corporation.

IXONOS TO DELIVER A SYSTEM PROVIDING FINNISH TELEPHONE SUBSCRIBERS WITH PAYEE INFORMATION FOR PREMIUM-RATE NUMBERS

Ixonos will implement for Suomen Numerot Numpac Oy an information system for the relaying of payee information. The system will cost-efficiently and easily provide information about the payment recipients associated with premium-rate services for customers of Finnish telecommunications companies which own Numpac. This improves the transparency and security of premium-rate service usage.

When a telephone bill includes charges for premium-rate services, it will also show which providers will receive those charges, in accordance with a recent amendment to the Communications Market Act. The main components of the system will be a database and various web interfaces. The web interfaces will be used by all telecommunications companies that are owners of Numpac and provide premium-rate numbers, and they will also be available to every telephone subscriber in Finland. The subscriber interface is estimated to serve approximately a million searches yearly.

The system will be built on the Ixonos Elastic Cloud™ platform, which enables excellent scalability and reliability. “In designing the user interface, particular attention was paid to ease of use and a top-class user experience”, says Teppo Kuisma, Vice President, Online Solutions, Ixonos. “The subscriber interface is based on responsive web design so that the user interface and the contents will automatically adapt also to low resolution displays such as those on mobile devices”, Mr Kuisma continues.

The back-end database will include a provisioning interface for feeding payee information directly into the billing systems of various telecommunications companies. This will allow payee information to be displayed on telephone bills regardless of which telecommunications company is managing the premium-rate number.

Suomen Numerot Numpac Oy helps telecommunication companies fulfil their number portability and routing obligations. The company is owned by telecommunications companies operating in Finland. The shareholders of Numpac are TeliaSonera Finland Oyj, Elisa Corporation and DNA Ltd.