Senate mulls ‘fairer, more reasonable’ SSB tax

MANILA, Philippines - Sen. Sonny Angara said he is considering “a fairer and more reasonable” excise tax on sugar-sweetened beverages (SSB) that will be more effective in curbing the prevalence of diabetes and obesity in the country.

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, who chairs the Senate Committee on Ways and Means, is looking to impose excise tax depending on the sugar content of the beverage.

“According to experts, if we’re talking about health and want to reduce the sugar consumption of Filipinos, the tax must be based on the sugar content of the beverage,” Angara said.

He noted 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 (DOF), the retail prices of a one-liter of Coca Cola 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 mixes from P5 to P8.

Under the bill pending in the committee, sugar-sweetened beverages include 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.

“Majority of the consumers of such drinks are ordinary Filipinos, who will feel the effects of increased prices. We might be unfairly targeting the poor,” the lawmaker said.

He said the same consumers may not be able to benefit from the plan to reduce income taxes because as minimum wage earners, they are already exempted from income tax.

The House-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 (Pasco), 80 percent of the consumers of these products are low-income earners.

Data from Pasco also showed 30 to 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 (BIAP) warned such move would result in a P20-billion decline in sales of sugar-sweetened beverages.

While the DOF estimates that additional revenue can range from P40 billion to P47 billion, Finance Undersecretary Karl Chua stressed the inclusion of sugar tax is not primarily intended to generate more revenues but it is a health measure meant to discourage consumers in 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.