Angara eyes ‘reasonable’ excise tax on beverages

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SENATOR Juan Edgardo Angara is eyeing a “more reasonable” tax on sugar-sweetened beverages by imposing excise tax depending on the sugar content of the beverage instead of taxing P10 every liter.

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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 beverage containing locally produced sugar, while others will be taxed P20 per liter.

Angara believes that his version of the tax reform measure will be more effective in curbing the prevalence of diabetes and obesity in the country. He also noted that a P10-excise tax may be too high, as this would jack up the prices of some sugary drinks by 50 percent.

“Experts say that to cut down the sugar consumption of Filipinos, the tax must be based on the amount of sugar in the beverages,” said Angara, chairman of the Senate ways and means 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 those who consume these kind of beverages are ordinary citizens who will be greatly affected by the price increase. We might be unfairly targeting the poor. While we recognize the health benefits of the proposed sugar tax, this could hurt the poor consumers, the retailers, and the beverage and sugar industries,” Angara said.

While the Department of Finance estimates that the government can earn an additional P40 billion to P47 billion from the planned excise tax, Finance Undersecretary Karl Chua stressed that the inclusion of sugar tax is not primarily intended to generate more revenues but was meant to discourage consumers from buying unhealthy drinks.

According to the Department of Health (DoH), consumption of sugar-sweetened beverages increases the risk of developing blood sugar disorders, obesity, diabetes, and other related diseases like bone fractures, hyperacidity, tooth decay and heart problems.

“We will study this measure thoroughly to ensure that this will not cause undue burden to Filipinos. We will work closely with our fellow senators and government agencies, especially the DoF and DoH, to come up with a pro-people reform,” Angara said.

Based on the latest price survey of the DoF, the retail prices of 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 from P5 to P8.

According to the Philippine Association of Stores and Carinderia Owners, 80 percent of the consumers of these products are low-income earners.

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