DOF pushes higher soft drinks tax

Finance Secretary Carlos G. Dominguez III     INQUIRER PHOTO

A proposal to raise taxes slapped on sweetened beverages would be pitched at today’s Cabinet-level, inter-agency Development Budget Coordination Committee (DBCC) meeting alongside widening the budget deficit target to 3 percent of the economy as early as this year.

Separately, Finance Secretary Carlos G. Dominguez said a reorganization was in the works at the Department of Finance (DOF) in the next six months, with the appointment of four new undersecretaries up for President Rodrigo R. Duterte’s approval.

“We have our revised organizational structure that will guide DOF operations. This new structure is an output of the transition process. I explained the new structure during the first DOF executive committee meeting last Friday and I directed our designated cluster heads to roll up their sleeves and hammer out the details with all of you over the next few days at the group and unit levels,” Dominguez told DOF employees during the first flag ceremony he attended as head of the agency Monday.

“By mid-July, I expect the cluster heads should be ready to brief the Office of the Secretary with updated organizational tables, a clear articulation of main functions, key result areas and priorities for the next six months. My expectation with regard to outcomes, is that we will be able to improve work quality, accelerate processing and receive zero customer complaints,” the finance chief added.

Dominguez told reporters that the revamp would allow them to “realign our work in teams rather than individuals.”

He confirmed that four new undersecretaries co-terminus with the Duterte administration would come in, with each one handling legal, revenue, administration, and public-private partnership (PPP) and special concerns.

The Inquirer earlier learned that the four nominees for undersecretary posts included former Privatization and Management Office chief Karen Singson, World Bank senior economist Karl Kendrick Chua, and lawyers Antonette Tionko and Bayani Agabin.

For today’s DBCC meeting, economic managers will work to make a “Duterte budget” from the remaining amount in the 2016 national budget as well as the proposed 2017 budget, Dominguez said.

The Finance chief also said they were looking at bringing to 3 percent of the gross domestic product (GDP) from the earlier programmed 2 percent of GDP the budget deficit for this year, but stressed that the “absorptive capacity” of agencies to spend should also be addressed to facilitate faster expenditures.

While the DBCC was expected to bring down revenue assumptions to widen the budget deficit, sources said the DOF would also put forward the proposal to slap higher taxes on sugar-sweetened beverages such as soft drinks, fruit drinks, sports drinks, sweetened tea and coffee drinks, energy drinks and all other non-alcoholic beverages that are ready-to-drink and in powder form.

The DOF had computed a windfall of as much as P35 billion from soft drinks alone coming from the health measure.

On the other hand, the products that would not be covered by the added tax include natural fruit juices, natural vegetable juices, yogurt, milk products, meal replacement beverages or medical food, as well as weight loss products.