Tax reform may force fast foodchain to hike prices
Golden Arches Development Corp., the franchise holder of McDonald’s in the Philippines, said it may raise prices to lessen the impact of higher tax under the Tax Reform for Acceleration and Inclusion law.
“We may have to raise beverage prices,” GADC president and chief executive Kenneth Yang told reporters.
“But what we try to do is we balance everything out. We continue to provide a lot of value for our customers,” he said.
McDonalds Philippines had 547 stores nationwide as of end-November 2017.
The company posted a net income of P977 million in the first nine months of 2017, up 19 percent from a year ago. Systemwide same-store sales grew 13 percent year-on-year to P18.5 billion in January to September.
Several companies expressed concerns over the impact of Train on their profitability this year. “All of us, all the companies will be affected in some shape or form but I don’t think the effect would be significant,” Manuel Pangilinan, chairman of PLDT Inc. and Metro Pacific Investments Corp., said.
Manila Electric Company, which is controlled by MPIC, said it could also increase electricity rates in February, with the implementation of the tax reform.
Aside from Meralco, MPIC have interests in tollways, water, infrastructure and mining.
The Train law, one of the five tax packages envisioned to increase state revenues and make the tax system fairer and simpler, reduced income taxes, expanded the value-added tax base and raised taxes on petroleum products, automobiles and sugar-sweetened beverages.