Excise tax on sugary drinks to protect poor from ailments, says DOF

The proposal to slap excise tax on sugary drinks has gained support from the Department of Health (DOH) and the National Economic and Development Authority (Neda), as it will not only generate additional revenues but also make Filipinos healthier, the Department of Finance (DOF) said Monday.

Finance Undersecretary Karl Kendrick T. Chua said the proposed measure “should be viewed mainly as a health measure that is meant to discourage the consumption of high-sugar beverages, while encouraging industry players to develop healthier product alternatives.”

Nueva Ecija Rep. Estrellita Suansing defended the measure, which she introduced in the House, along the same lines.

“Contrary to the misperception that the proposal will hurt poor families the most, [it] will actually protect them from the threat of serious ailments such as diabetes and non-communicable diseases related to the excessive intake of sugar, including chronic disease, diet-related cancers, and chronic heart and cardiovascular diseases,” she said.

“These diseases pose a serious threat to public health, and should be instantly addressed by my proposed measure,” she added.

Suansing’s House Bill No. 292 aims to slap a P10-per-liter excise tax on sweetened beverages using local sugar. Her proposal was incorporated into HB No. 5636, which is the Duterte administration’s proposed Tax Reform for Acceleration and Inclusion Act (Train), which the Lower House approved before Congress went on sine die adjournment in May.

While the DOF initially wanted to include the tax on sugary drinks in another tax package, Chua said the DOF “[does] not object that this is being advanced in the Congress by the Department of Health and all the stakeholders that have looked into this measure as an important way of curbing the growing problem of diabetes and obesity.”

“Many people have said that this tax is anti-poor,” Chua added. “But for a non-essential [food item], especially for a non-good, economic principle says that we should not use the regressivity argument at all. In fact, it is far more progressive over the whole spectrum if people’s consumption of these non-essentials and non-good are reduced so that they can consume the more important aspects.”

“Because this is a health measure, the objective really is to reduce consumption, and studies have shown that a 20-percent increase in price is sufficient or necessary to reduce significantly the consumption,” Chua added.

Meanwhile, DOH Undersecretary Mario Villaverde said it would be a “poor excuse” to call sugar sweetened beverages as “viable” substitutes to provide energy for individuals.

That excuse, he said, would deny “a person’s right to nutritious and safe food in order to be healthy and productive adults.”

For his part, Neda Director Reynaldo Cancio called the measure “generally progressive.” /atm