Beverage manufacturers buck higher taxes

Beverage manufacturers have reiterated their opposition to a pending bill aimed at jacking up the taxes slapped on sweetened beverages, which was approved by the ways and means committee of the Lower House on Tuesday.

In a statement, the Beverage Industry Association of the Philippines (BIAP) said that amid calls for income tax cuts, it “supports measures that seek to reform our income tax system” as such would “reduce inequity in the taxation structure, promote inclusive growth, empower our consumers and the middle-class, and boost our country’s competitiveness.”

But BIAP, the domestic beverage industry’s umbrella organization, said its member-companies remained opposed to House Bill (HB) No. 3365, which proposes to levy an additional 10-percent ad valorem tax on sweetened drinks.

BIAP claimed that HB 3365 was “anti-poor and anti-business.”

“To impose a tax on soft drinks and other sweetened beverages like powdered juice drinks, three-in-one coffee and ready-to-drink juice is taking away power from the Filipino consumer. This additional tax on basic goods and products commonly purchased by majority of Filipinos, particularly those in the lower socio-economic classes, will make items like coffee, juice and soft drinks more expensive for ordinary consumers,” BIAP explained.

In contrast, BIAP said HB 3365 “exempts 100-percent pure and natural fruit and vegetable juices, 100-percent pure or fresh milk, all milk products and alternatives as well as yogurt and yogurt beverages—all products typically positioned in the premium market and consumed by more affluent consumers” from additional taxes.

“Wealthy Filipino who can afford pure beverages will be spared from the tax on sweetened beverages. In addition, crafted drinks such as those sold in coffee or tea shops, which are similarly sweetened or have sugar, will not be taxed a single centavo,” BIAP said.

“Instead of taxing goods typically purchased by consumers in higher socio-economic brackets, HB 3365 put the burden of taxation on commodities consumed by middle, lower middle and lower income classes. Viewed in this light, it is obvious that the bill, effectively, is anti-poor legislation,” it added.

Department of Finance estimates showed that the government would generate up to P10 billion in additional revenues a year from higher taxes on sweetened drinks.

BIAP groups Asia Brewery, Coca-Cola Co., Mondelez Philippines, Pepsi Cola Products Philippines, San Miguel Corp. and Zest-O.