The proposed excise tax on sugar-sweetened beverages (SSB) is “too high” for Filipinos, a consumer group said on Friday.
In a statement, Bantay Konsumer, Kalsada, Kuryente (BK3) said its supports the Philippine Association of Stores and Carinderia Owners (Pasco) in its campaign against the tax.
According to BK3, Pasco has gathered more than 300,000 signatures to oppose the tax measure forwarded in House Bill (HB) 5636, which is part of the government’s banner tax reform program known as “TRAIN.”
Earlier this year, the House of Representatives approved the so-called sweet tax, which imposes an excise tax of P10 per liter on drinks with local sugar and P20 per liter on those with imported sugar or sweeteners.
BK3 convenor Louie Montemar said that, based on the group’s computation, 40 percent of the daily income of store owners comes from the sales of drinks, such as juices and flavored instant coffee in sachets.
The proposal could “double or even triple the prices of these products, which are consumed” daily, he added.
“Unsurprisingly, the poor view the proposed excise tax as ‘unfair’ and ‘oppressive’—a stand shared by manufacturers and retailers,” Montemar said.
“We understand that the government needs to generate revenues to support its programs. However, the proposed excise tax could only worsen the already difficult life of low-income consumers,” he added.
The convenor noted that there are other development schemes and revenue options that could be considered. One would be shifting to a public-private partnership (PPP) model, instead of getting funds from the country’s budget to support its infrastructure program.
This would allow the government to “free up its resources to help the poor, instead of imposing additional burden on them,” Montemar said.
He also said the government can also focus its revenue-generation program on stopping revenue leaks caused by smuggling, illicit trade, poor tax collection and corruption.
Citing a multi-industry study by the University of Asia and the Pacific (UAP), BK3 said illicit traders smuggled at least P904.6 billion worth of goods into the country over five years. The Department of Finance (DoF) estimates that potential revenues from the sugar tax is about P47 billion.
“Revenue from those illegal activities could easily cover whatever revenue is generated from the SSB tax,” Montemar said.
Health concerns related to the consumption of sugary drinks and obesity are also “relatively weak,” he added, noting that data from the 2017 State of Food Security and Nutrition in the World by the Food and Agriculture Organization (FAO) show that undernutrition, not obesity, is the more serious problem in the Philippines.