SENATOR Juan Miguel Zubiri on Saturday proposed a three-tiered tax on sugar-sweetened beverage (SSB) that he believes is “not anti-poor.”
The Senate Committee on Ways and Means, chaired by Sen. Juan Edgardo Angara, has been conducting public hearings on the comprehensive tax reform package dubbed as Tax Reform for Acceleration and Inclusion (TRAIN).
“We want to earn government revenue through the sugar tax but, we don’t want to kill the industry,” Zubiri said. The Senate has yet to craft its version of tax reform program.
“We are studying the following specific tax based on content: Tier 1: 0-5 grams per liter-Exempt; Tier 2: 6-12 grams per liter-P3; Tier 3: Above 12 grams per liter-P5,” he said.
Or based on volume, P5 per liter for those containing locally-produced sugar, and P20 per liter for others which contain imported sugar and sweeteners such as HFCS (high fructose corn syrup), he added.
The House of Representatives had already passed House Bill 5636 that imposes a P10-excise tax on every liter of sugar-sweetened beverages, which 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.
“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,” Zubiri said.
Angara said his panel will study the proposal of Zubiri and the Sugar Alliance of the Philippines imposing SSB tax per liter but at a lower rate of P5 per liter in the first two years of implementation, and then shift to a sugar content-based taxation for the suceeding years.
He said that part of the incremental revenues of the proposed tax on sugar-sweetened beverages, estimated at P47 billion, should be used to sustain feeding programs to address malnutrition, widen access to potable drinking water supply, and to expand the dialysis program of the Philippine Health Insurance Corp.
Zubiri said he fully supports the position of medical doctors to stop excessive sugar consumption but said,
“However, we should not slap a tax rate that will make sugar, food and beverage items containing sugar very expensive.”
“If we tax it too steeply, people may not to be able to afford it because of the high price. One example is the flavored milk drinks which improves taste and encourages milk drinking, especially among children,” he said.
He also warned that an “excessively high” sugar tax could lead to the collapse of the sugar industry, displacement of thousands of farmers and mill workers, and hunger to at least 5 million Filipinos dependent on the sugar industry.