Businessman Alfredo Yao, who owns Zest-O and RC Cola beverage brands in the Philippines, described as unfair and unjust the government’s plan to impose higher value added tax on the beverage industry.
Yao questioned why the beverage industry was being singled out among the industries that were using sugar in their products.
“Their reason why they are planning to tax-based sugar drinks is because of health reasons. But why tax a specific industry? How about candy and ice cream makers that also use sugar? Why focus only on the beverage,” Yao said in an interview during a forum. “It is unfair and unjust.”
Yao said instead of imposing higher taxes on the beverage industry, the government should impose higher VAT on sugar itself.
“This way, the burden will not only be shouldered by industry but by every one,” Yao said.
He said the beverage industry raised its concern about that planned higher tax to the Finance Department.
Sugar-based drinks already carry a 12 percent value-added tax that is passed on to buyers.
Universal Robina Corp. president Lance Gokongwei, who was in the same forum, did not comment on the possible impact of the planned imposition of higher VAT on beverage and junk food.
URC is one of the biggest snack food and tea drink manufacturers in the country.
Share price of URC has been on the downward trend as investors expect the company’s operations to be significantly affected by the planned tax on sugar-based drinks and junk food.
The higher tax on sugar and junk food also known as “fat tax” is being considered to be part of the tax reform agenda of the Duterte administration.
The Finance Department earlier said the tax reform program aimed to raise enough capital to finance planned spending on infrastructure, education, health, social protection and other programs necessary to create decent-paying jobs and improve the living standards of Filipinos.