Finance exec bucks Low tax on sugary drinks

The Department of Finance is pushing for a more than P5-a-liter excise tax on sugary drinks as an official said any levy below this amount would defeat the purpose of it being a health measure.

On the sidelines of a forum organized by the Economic Journalists Association of the Philippines last Friday, Finance Undersecretary Karl Kendrick T. Chua told reporters that a single-tier excise tax of P5-10 per liter would augur well to reducing consumption of sugar-sweetened beverages.

“The health objective is that the price should increase by 20 percent to have the optimal impact, so a 20-percent increase is P10 per liter. But it’s also okay if the price will increase by 10 percent,” Chua said.

The DOF wanted a single tax regardless of sugar content, he added.

“Have you seen the small [soft drinks]? All of them have below seven grams [of sugar content] but you can still drink four of them. So the tier will have no effect, the threshold will not work,” Chua explained.

Last week, Senate ways and means committee chair Sen. Sonny Angara said stakeholders were pushing for a three-tier volume-based tax of P5 and below per liter on sugar-sweetened beverages.

“We want to get the consensus as to where the levels will be set, but for the senators, they’re okay with the three tiers, as long as the maximum level does not exceed the equivalent of P5 per liter, so it’s transposed to per sugar content,” Angara had said.

House Bill No. 5636 passed by the Lower House in May included in the proposed Tax Reform for Acceleration and Inclusion (Train) the P10-a-liter excise tax on sugar-sweetened beverages that use local sugar.