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Sunday, May 19, 2024

Proposed excise tax on sodas ‘too high’–Senator Angara

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The proposal to impose a tax of P10 per liter of soda (softdrinks) or sugar-sweetened beverage would be scrutinized by the Senate Ways and Means committee chaired by Senator Sonny Angara even as many see the tax hike as “too high.”

“The Senate panel will work with our government agencies and stakeholders to ensure that any anti-poor or unreasonable provisions will not be included,” said Angara.

Angara took into consideration the sentiments of the public who sees the additional tax as very high relative to the actual price which could range from P20-P30.

The tax reform measure recently passed by the House of Representatives includes a provision imposing a P10 excise tax on every liter of sugar-sweetened beverages containing locally produced sugar, while others will be taxed P20 per liter.

Instead of taxing P10 every liter, Angara is looking into imposing excise tax depending on the sugar content of the beverage.

The senator also noted that a P10 excise tax might be too high, as this would jack up the prices of some sugary drinks by 50 percent.

Based on the latest price survey of the Department of Finance, the retail price of a one liter Coca-Cola bottle will increase from P22 to P34; sachet prices of powdered drinks Nestea, Tang or Eight O’ Clock will increase from P9 to P20 and 3-in-1 coffee from P5 to P8.

Under the bill, SSB includes sweetened juice drinks, tea and coffee; all carbonated beverage with added sugar; flavored water, energy drinks, sports drinks, powdered drinks not classified as milk;  juice, tea and coffee; cereal and grain beverages; and other non-alcoholic beverages that contain sugar.

Angara said he is considering a fairer and more reasonable excise tax on SSB, which would be more effective in curbing the prevalence of diabetes and obesity in the country.

He noted that many countries have adopted similar measures as a health measure to improve the overall well-being of their citizens.

Some beverages curently included are 3-in-1 coffee, some milk products, and powdered drinks.

The senator said this is why he suggested to the DoF to study a content-based tax which would lead to healthier beverages being produced.

Angara said that right now, coffee and some milk are treated as the same as soda which he believes should not be the case.

The HOR-approved tax reform package aims to lower income taxes of middle income earners, while limiting value added tax (VAT) exemptions and adjusting excise taxes on oil, automobiles, and sugar-sweetened beverages.

According to the Philippine Association of Stores and Carinderia Owners, 80 percent of the consumers of these products are low-income earners.

Data from Pasco also showed that 30-40 percent of the income of sari-sari store owners comes from the sale of coffee, juice and carbonated drinks.

Meanwhile, the Beverage Industry Association of the Philippines said that such move would result to a P20-billion decline in sales of sugar-sweetened beverages.

“While we recognize the health benefits of the proposed sugar tax, this could hurt the poor consumers, the retailers, and the beverage and sugar industries. Lalo na po ang kabuhayan ng ating maliliit na mga negosyante, mga may-ari ng sari-sari stores, mga magsasaka at iba pang mga manggagawa na maaapektuhan dito,” Angara said. [Especially those who depend their subsistene from sari-sari store owners, farmers and other laborers who would be severely affected by the measure].

Even as the DoF estimates that additional revenue can range from P40 to P47 billion, Undersecretary Karl Chua said that the inclusion of sugar tax is not primarily intended to generate more revenues but as a health measure meant to discourage consumers from buying unhealthy drinks.

According to the Department of Health, consumption of sugar-sweetened beverages increases the risk of developing health problems such as blood sugar disorders, obesity, diabetes, and other related diseases like bone fractures, hyperacidity, tooth decay and heart problems. 

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