Health Secretary Teodoro Herbosa, citing health and economic reasons, says he backs proposals to increase excise taxes on sodas and other sweetened beverages and junk foods.
In an interview with radio network dzBB, Herbosa said the imposition of higher taxes on such products would lead to lower consumption of unhealthy foods.
“Yung epekto ‘neto sa health, nagkakaroon ng diabetes, kidney disease, among others. On the health perspective, maganda magkaroon ng tinatawag na excise taxes on those particular products na hindi beneficial sa ating health,” said Herbosa.
He also emphasized that the revenue from the additional excise taxes could bankroll vital government programs and projects.
“If you will ask me, I’m all for it because it would mean more revenues for the government to finance what we call social services,” Herbosa said.
“We discussed in the Cabinet meeting that we have projects on hunger and malnutrition, and it looks like that is where the Department of Finance will source out the funds,” he added.
Herbosa cited the excise tax on alcohol and tobacco as an example, saying this yielded positive results.
“Nung undersecretary ako, tumulong ako sa pagbalangkas at pagpasa ng sin tax or excise tax on tobacco and alcohol. Dahil dun sa batas na yun, dumami ang tax collection para magamit sa Universal Health Care,” explained Herbosa.
“Dahil dun kumonti din ang naninigarilyo, from 29 percent to now I think 18 percent… Ganun din (ang inaasahan sa) problema sa sugar drinks,” he said.
The secretary admitted however, that there were other things that should be considered on the planned tax hike for sweetened drinks and junk foods.
“Ang usapan diyan, may debate din sapagkat parang naaalisan ng source yung ating mga kababayan na dun kinukuha yung kanilang energy, sa sugar drink. Pero yun mga junk food at salty food, siyempre dun naman mag lelead sa hypertension, kidney disease, so maganda mag hinay-hinay ang mga kababayan natin diyan,” he added.
The DOH chief also mentioned possible effects on private firms, particularly in the soft drink industry.
“Ang debate diyan, pag humina yung hanapbuhay ng soft drinks, mawawalan ng empleyo yang mga nagtatrabaho sa industriya. Kaya hinahanap dapat yan ng mga kapalit na produkto na mas healthy gaya ng mga juices for example or some other product na ma-rereplace ‘yung production,” Herbosa said.
Early on, Finance Secretary Benjamin Diokno provided details of the proposed tax measures.
“Under the proposed tax program, the DOF plans to impose a P10 per 100 grams or P10 per 100 milliliters tax on pre-packaged foods lacking nutritional value, including confectioneries, snacks, desserts, and frozen confectioneries, that exceed the DOH’s specified thresholds for fat, salt, and sugar content,” said Diokno in a statement.
Diokno said the DOF and the DOH “are jointly pursuing a junk food and sweetened beverage tax as a proactive measure to tackle diabetes, obesity, and non-communicable diseases related to poor diet.”
Budget Secretary Amenah Pangandaman disclosed earlier that the government would push for the passage of new revenue measures that include additional taxes on sweetened beverages and junk food within the year.
The target would be to have the new tax measures take effect in 2024, so they would have until the end of the year to push for their passage, Pangandaman said.
Aside from generating additional revenues to be used for vital government projects, the higher taxes would result in better health for the people, Pangandaman said.
In a statement, Diokno said the Finance and Health departments were jointly pursuing a junk food and sweetened beverage tax “as a proactive measure to tackle diabetes, obesity, and non-communicable diseases related to poor diet.”
Under the proposed tax program, the DOF plans to impose a P10 per 100 grams or P10 per 100 milliliters tax on pre-packaged foods lacking nutritional value, including confectioneries, snacks, desserts, and frozen confectioneries, that exceed the DOH’s specified thresholds for fat, salt, and sugar content.
Additionally, the DOF intends to increase the sweetened beverage tax rate under the TRAIN Law to P12 per liter, regardless of the type of sweetener used. This tax rate will be indexed annually by 4 percent, and exemptions will be eliminated to broaden the tax base. These measures aim to strengthen the effectiveness of the sweetened beverage tax by further discouraging the consumption of such beverages.
The higher taxes on junk food and sweetened beverages are expected to generate an additional P76 billion during the first year, the DOH said, and result in a 21 percent reduction in the consumption of junk food.
Pangandaman said for the first year of implementation alone, revenues to be generated from the sugary beverages were projected to be about P40 billion to P50 billion.
“On salty food, [we don’t have the figures] because this is still being studied. But Secretary Benjamin Diokno and the Department of Finance are very positive on the passage of [these] revenue measures,” Pangandaman said.
Earlier, Diokno said the administration wants to impose higher taxes on sugary beverages, motor vehicles and mining to raise much-needed revenues.
The DOF expects the revision of the excise tax on sugary drinks could raise around P53.7 billion, motor vehicles at P15.8 billion, and P12.4 billion from the mining tax.
Diokno said these new tax measures were on top of the remaining tax reform packages that were left behind by the Duterte administration.
Diokno said the incremental revenues from the tax package will fund socio-economic programs initiated by the Marcos administration, such as the Department of Social Welfare and Development’s food stamp program.
This program will provide support to 1 million food-poor households, to alleviate food insecurity and malnutrition, he said.
