All sugar-sweetened drinks would be slapped a P10-a-liter excise tax once the Department of Finance (DOF) convinces Congress to pass its tax reform program.
In a recent speech before the Rotary Club of Makati, Finance Secretary Carlos G. Dominguez III unveiled the proposal to impose a uniform excise on sugar-sweetened beverages, whether in liquid or powdered form.
The tax would not only be a revenue but also a health measure, Dominguez said.
The proposal was similar to the implementation of “sin” taxes aimed at safeguarding public health, the Finance chief said.
According to the DOF, to be covered by the P10-a-liter excise tax are soft drinks, soda pop, energy drinks as well as sweetened tea and coffee.
An earlier draft of the DOF’s tax policy reform program proposal also showed the plan to levy a P5-a-kilo excise tax on sugary products, including domestic raw sugar, refined sugar as well as imported sugar and sugar substitutes, which would result in fresh revenues worth P18.1 billion.
The comprehensive tax reform program, which will be submitted Congress before the month ends, would have four main packages aimed for passage in the next three years: Personal income tax and consumption; corporate income tax and incentives; property tax and capital income tax.
Another package plans to impose a fatty food tax, a carbon tax, casino and lottery tax, mining taxes as well as a luxury tax on cars, jewelry and yachts.
This consumption tax package, according to official documents, should be passed by Congress “as needed” and could generate P109.4 billion in revenues.
Separately, the Management Association of the Philippines (MAP) said Friday that it “fully supports the tax reform package of the Duterte administration for a simpler, equitable and efficient tax system that would encourage voluntary compliance, lower the compliance cost, promote progressivity and expand the tax base while spreading the tax burden.”
“Having fair, simple and easy-to-comply tax laws will help improve the ease of doing business in the country and will encourage more local and foreign investments,” MAP said.
MAP urged the enactment of a holistic tax reform measure that would correct current inequities, simplify the tax system to encourage compliance and pursue measures that would counter the effects of tax rate adjustments.
MAP also encourage the DOF, the Senate and the House of Representatives to exhaust all possible means to make the tax system simpler to administer, fairer to taxpayers and more attractive to investor.