FINANCE Secretary Benjamin Diokno said over the weekend that allowing industrial users to directly import their own sugar requirement will serve as the “sweetener” for them to accept the new tax schemes on sugary products.
“Expectedly, producers and sellers of sugary products subjected to tax will object as it will raise the selling price of their products to the market. But knowing the big difference between the world price and the domestic price of sugar [a major input in the industry], then allowing the industry to import their own sugar requirement would reduce their cost of production,” Diokno said.
“This is the ‘sweetener’ or incentive for producers of sugary products to accept the broader, simpler tax on sugary products,”Diokno said.
He said the proposal makes good economic sense, as it simplifies the tax system, wherein one uniform rate is better than dual rates.
He said it achieves the proposal to make Filipinos live healthier and longer lives. In the long run, it also reduces the costs to the government for providing health care for its people.
Diokno earlier said the Department of Finance and the Department of Health 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 by 4 percent annually 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 implementation of the junk food and sweetened beverage tax package is projected to generate an additional P76 billion during the first year. The tax package is estimated to result in a 21 percent reduction in the consumption of junk food.
The incremental revenues from this tax package will fund important 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 one million food-poor households, to alleviate food insecurity and malnutrition.
Last week, Budget Secretary Amenah Pangandaman said the government would push for the passage of new revenue measures that include additional taxes on sweetened beverages and salty food within the year. Julito G. Rada