The impending tax law on sugar-sweetened beverages, currently being studied carefully by both houses of Congress, is seen to grossly impact the C, D, and E classes of communities across the country, local food manufacturers and grocery owners said Monday.
The Tax Reform for Acceleration and Inclusion or House Bill 5636, formerly known as the Comprehensive Tax Reform Package, proposes taxing SSBs, which the group said “has been an ongoing issue, and various sectors are appealing to President Rodrigo Duterte to reconsider” signing the proposal into law.
Based on the latest study done by the Philippine Chamber of Food Manufacturers, Inc., the proposal to impose an excise tax of P10 per liter of volume capacity on SSBs “will not only be the highest in the world, it will also hit the poor the most,” the group added.
In a statement, the chamber said that if the TRAIN is approved and the proposed new tax is passed, a 3-in-1 coffee sachet, currently priced at P5, would then cost P8. A one-liter bottle of juice concentrate currently priced at P9 would have a retail price of P30, a liter of iced tea currently priced at P20 will be P30, and carbonated drinks currently sold at P15 per liter will cost P25.
However, this impending tax measure, based on the PCFMI study, is seen to increase prices of the usual commodities commonly purchased by Filipinos in the lower classes of society.
This has led to sentiments of food makers and store owners that HB 5636 “is increasingly seen by those who will be directly impacted as anti-Filipino and anti-poor,” specifically sari-sari store owners, whose biggest income apparently comes from selling SSB products.
“A typical sari-sari store owner earns an average of P1,000 per day. About 30 to 40 percent of that total, around P300 to P400, comes from the sale of coffee, juice and carbonated drinks, so almost half of our net income is from the sale of sweetened beverages,” said Philippine Association of Stores and Carinderia Owners (Pasco) president Victoria “Nanay Vicky” Aguinaldo.
“I therefore appeal to our good President, as well as to all our congressmen and senators to please carefully reconsider the passing of this new tax measure into law or at the very least, delay it until a better alternative is available,” Aguinaldo said.
“I think they need to revisit this proposal again and possibly make the necessary adjustments and improvements to ensure that it won’t be as detrimental to the poor, more specifically, the sari-sari store and carinderia owners, as it is right now,” she added.
The products covered by the TRAIN proposal, considered as the Duterte administration’s signature tax measure, will include all sweetened juice drinks, sweetened tea, sweetened coffee, all carbonated beverages with sugar, including those with caloric and non-caloric sweeteners, flavored water, energy drinks, sports drinks, powdered drinks not classified as milk, juice, tea, and coffee, cereal and grain beverages, and even non-alcoholic beverages with sugar.
The government’s vision for TRAIN is to create “a tax system that is simple, fairer, and more efficient, characterized by low rates and a broad base that promotes investment, job creation, and poverty reduction.”
Based on the latest statistics on the number of registered sari-sari stores in the country, there are currently 1.3 million sari-sari stores nationwide.
An estimated 91 percent of all retail stores in the country are sari-sari stores. They “form part of the economic backbone of the country. Providing them more opportunities can only mean greater economic development for our nation as a whole,” said Trade Secretary Ramon Lopez at a recent gathering.
If the TRAIN is passed into law, Pasco feared at least half of sari-sari stores nationwide will eventually close shop, because it will no longer serve as a viable source of additional income for the family household.
The proposal, the group argued, “will therefore directly or indirectly translate to around 133,750 jobs lost, an increase of 1.5 percent in the unemployment rate, a P20-billion decline in beverage sales, around a P2.4-billion loss in VAT (Value Added Tax), a P7-billion loss from affected industries, and more than P130 billion investment losses for the Beverage Industry Association of the Philippines (BIAP).”