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Tax incentive mulled for ‘less-sugared’ products

Senator Sonny Angara said on Monday that the proposed P10 per liter tax on sugar sweetened beverages will be lowered by 50 percent and implemented under a three-tier system to give incentives to those who will manufacture drinks with less sugar content.

He said some stakeholders have recommended to go for a volume-based tax at P5 (per liter), but said this would not distinguish between a beverage which has one teaspoon since there will be the same treatment.

“So it’s a bit blunt if it’s not really targeted as sweetened. So we might look into the possibility of putting levels to distinguish better sweeter and beverages which are not so sweet. It’s difficult to set that. We want to get the consensus as to where the levels will be set. But, for the senators, they’re okay with the three tiers as long as the maximum level does not exceed P5 – equivalent of P5 per liter,” he explained.

Under the existing proposal, the cost of a one-liter bottle of soda will increase by P11 or from the current P27 to P38. The prices of sachets of powdered drinks, such as juice and 3-in-1 coffee, are projected to increase from P9.75 to P20.75.

Angara said the Department of Finance should consider tweaking its proposal by using as basis beverages’ sugar content rather than volume.

“Those that can help jn our health, if we are to encourage healthy habits, it should nit be volume-based, but on the measurement of the contents,” he said.

The chairman of the Senate committee on ways and means said that in other coutnries, if they receive a minimum acceptable of sugar, whether 50 grams, and it is being taxed, anything over that “tapos pag lumampas ka doon, meron silang scale depende sa content.”

Angara said he plans to pass a committee report on the proposal by September.

Senator Juan Miguel Zubiri, meanwhile, proposed a three-tiered tax on SSB), stressing that while they want to earn government revenue through the sugar tax but, the industry should not be killed.

“I believe that my proposal hits the sweet spot wherein the taxation method and tax rates can address important concerns such as government’s need for revenue, need to stop the rising incidence of diabetes, obesity and dental caries among the many health issues related to excessive consumption of sugar. I also believe the tax rates to be adopted should also push my advocacy for the avoidance of cancer-causing high fructose corn syrup [HFCS],” he said.

SSBs include sweetened juice drinks, tea and coffee, carbonated beverages with added sugar, flavored water, energy drinks, cereal and grain beverages, and other non-alcoholic beverages that contain sugar.

Drinks exempted from the proposal are milk products, natural fruit juices, ground coffee, and unsweetened tea.

Imposing an excise tax of P10 per liter is among the measures included in the House-approved version of the Department of Finance-proposed tax reform law.

“We want to incentivize them to manufacture drinks which are perceived to be healthier and contain less sugar. And that would veer away from the volume or at least it would suggest that you would have to put different levels so you can reward those who put less sugar in their beverages,” said Angara.

If the Department of Health (DOH) will be amenable to trimming the proposed tax on sugary drinks, Finance Undersecretary Karl Kendrick Chua said they will support it being a health measure.

“If this is a revenue measure, hindi kami papayag. So health measure talaga siya,” pointed out Chua adding thst trimmjng the proposed P10 per liter levy will cut in half the expected P47 billion gains from the excise tax measure.

“Well, I think, we should look at it the same way as the government is looking at it. They say it’s primarily a health measure but it’s weak,” Angara said.

“It weakens its standing as a health measure that’s why we might have to put in... look at the possibility of putting levels, meaning you exceed a certain amount of sugar, then maybe you can be P5, but if you don’t exceed, you can be below P5,” he added.

Chua said at least P47 billion in revenues will be earned by the government from taxing SSBs alone.

Topics: Sugar sweetened beverages , Senator Sonny Angara , Tax
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