Dominguez will drop sugar tax if Senate passes DOF-backed bill in full

Finance Secretary Carlos Dominguez III
(File photo by JOAN BONDOC / Philippine Daily Inquirer)

The Department of Finance (DOF) will only be amenable to removing the proposed excise tax on sugar-sweetened drinks from the first comprehensive tax reform package if the Senate will pass the DOF-backed bill in full, as President Rodrigo Duterte wishes.

“What I told Senator [Sonny] Angara was I am willing to drop the sugar tax, but pass the original DOF bill,” Finance Secretary Carlos G. Dominguez III told reporters over the weekened. “You don’t have to pass [the excise tax on sugary drinks] this time, but pass the original bill that was filed by Senate President [Aquilino] Pimentel.”

Last week, news reports quoted Angara as saying that Dominguez was amenable to trade the higher levy on sugar-sweetened beverages as long as the Senate would pass the excise tax on fuel in full.

But Dominguez said what he told Angara was that the Senate should pass Pimentel’s Senate Bill No. 1408 as a whole package, and he was not just referring to the proposed higher excise tax on oil products.

According to Dominguez, Pimentel’s bill is expected to gain about P167 billion in net revenues, higher than the P134 billion in the version approved by the House of Representatives.

The P10-per-liter excise tax on sugar-sweetened drinks is expected to generate P47 billion in the first year of implementation.

Under House Bill No. 5636, or the Tax Reform for Acceleration and Inclusion (Train), passed by the House in May, the increase in taxes to be slapped on petroleum products will be staggered in three years, although the DOF originally proposed a one-time adjustment of P6.

Dominguez said Congress could eventually pass the excise tax on sugary drinks later on, together with the so-called “health tax” package that would also impose higher levy on fatty foods. /atm