The Senate ways and means committee on Thursday said it would consider a content-based, multi-tiered tax rate on sugar-sweetened beverages (SSB) with a cap of P5 as opposed to the P10 per liter proposed by the Finance department.
“There is already a suggestion from some of the stakeholders to go for a content-based tax at P5, but the drawback to that is it does not distinguish between beverages [which are sweet and are not so sweet]. So it’s a bit blunt… We might look into the possibility of putting levels to distinguish between sweeter and beverages which are not so sweet,” committee chairman Sen. Juan Edgardo Angara told reporters on the sidelines of a Senate hearing.
Angara said stakeholders would have to come up with a consensus on where to set the levels but added that senators were amenable to three-tiered rates as long as the maximum level does not exceed the P5 cap.
“We want to incentivize them to manufacture drinks, which are perceived to be healthy and contain less sugar, and that would veer away from the volume, and that would suggest that you have to put different levels, so you can reward those who put less sugar on their beverages,” he explained.
Asked for comment, Finance Undersecretary Karl Kendrick Chua said the government would defer to what the Health department is pushing.
“Both have pros and cons, it now depends on which one will deliver the best health impact because its really a health measure. It is primarily a health measure so we will meet that objective before the revenue,” he said.
Health Undersecretary Mario Villaverde said the department remained firm on its position to support the P10 per litter sugar tax.
“It is very simple to administer, it is easier to enforce, it’s because it’s a flat rate. So not only on the part of DoH, but also on the part of the BIR ([Bureua of Internal Revenue) under the DoF (Department of Finance). It’s much simpler easier to enforce and administer because of the simplicity of the mechanism,” he said.
Villaverde added that the P10 per liter sugar tax would also discourage consumption.
Finance department computations show P47 billion in potential revenues during the first year of implementation of the sugar tax.