Concepcion bucks higher tax on sweetened beverages

Catherine Talavera - The Philippine Star
Concepcion bucks higher tax on sweetened beverages
Artificial sweeteners are "still likely a useful tool that can help reduce weight gain when replacing sugar -- if the right sweetener is used," he said.
AFP / Getty Images / Derek White

MANILA, Philippines — Go Negosyo founder Joey Concepcion is opposing proposals to increase the tax on sugar-sweetened beverages, saying this would affect many small businesses especially in the provinces.

“I think they should junk the whole thing because it will affect a lot of people,” Concepcion told reporters partly in Filipino during an interview. “I think the lawmakers will also think (it) through. A lot will be affected, the small businessmen.”

Trade Secretary Alfredo Pascual gave assurance that there would be public consultation on the proposal to increase the tax.

“I am sure the voice of the enterprises that would be affected would be heard fully,” he said.

The Department of Finance (DOF) is moving to increase the tax rate under the Tax Reform for Acceleration and Inclusion (TRAIN) law to P12 per liter, regardless of the type of sweetener used.

Currently, there is a two-tier rate of P6 and P12 per liter, as started by the Duterte administration.

Under the TRAIN Law, a P6 per liter excise tax on beverages using caloric and non-caloric sweeteners is mandated and P12 per liter on beverages using high-fructose corn syrup.

DOF data shows that the government can generate P53.7 billion from an expanded levy on sweetened beverages during the first year of implementation by 2025.

This could increase to P67 billion by 2026 and further expand to P80.6 billion and P96.5 billion by 2027 and 2028. In total, anticipated revenues from the measure could reach P297.8 billion over a four-year period.

Apart from the increased taxes on sugar-sweetened beverages, the DOF also proposed earlier the imposition of new taxes on junk food to generate revenues while addressing diseases related to poor diet.

The Joint Foreign Chambers of the Philippines (JFC) earlier urged the government to reconsider proposals to impose new taxes on junk food and increase the existing tax on sugar-sweetened beverages, as this would be burdensome to consumers and discriminatory to some businesses.

The JFC noted that the proposal would affect micro and small enterprises that rely on selling these products as a source of income.

“Imposing additional taxes will only strain the capacity of businesses in affected sectors to continue operations and grow their businesses, especially when issues related to the supply of certain raw materials remain unresolved,” the group said.

The JFC is composed of the American Chamber of Commerce of the Philippines, Australian-New Zealand Chamber of Commerce of the Philippines, European Chamber of Commerce of the Philippines, Japanese Chamber of Commerce and Industry of the Philippines Inc., Korean Chamber of Commerce Philippines and the Philippine Association of Multinational Companies Regional Headquarters Inc.

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