The head of the Duterte administration’s economic team will first seek the Department of Health’s (DOH) explanation why it is pushing to slap higher tax on salty food.
“We have to discuss thoroughly with them” was Finance Secretary Carlos G. Dominguez III’s response when asked what he or the Department of Finance (DOF) thought about the DOH’s proposal.
At the start of this administration, the DOF tinkered with the idea of “fatty food tax” as among new revenue-generating measures alongside a luxury tax on cars, jewelry and yachts, a carbon tax, mining tax as well as casino and lottery tax.
Back then, the DOF said “fatty food tax” would cover “high-sugar and unhealthy products like junk food and soft drinks.”
Sugar-sweetened beverages were later on levied with new excise taxes under the Tax Reform for Acceleration and Inclusion (TRAIN) Act, which took effect in 2018.
Last Tuesday, Health Secretary Francisco Duque III cited a United Nations report showing that salty diets could lead to hypertension and other noncommunicable diseases (NCDs).
“We have seen the positive effects of increasing taxes on sin products. The same strategy might work for excessive consumption of salt. It might be the most effective way to go,” Duque said.
The DOF and DOH have also been jointly pushing for higher “sin” taxes on cigarettes, heated tobacco, vapes and alcoholic drinks not only to shore up government revenues but also to lessen public expenditures on diseases.
Early this week, the DOF said it was backing up the pending bill in the Senate aimed at further jacking up the excise taxes slapped on alcoholic drinks for both health and revenue gains.
“We are one with Sen. Pia Cayetano in affirming that higher taxes are the most cost-effective way to discourage excessive consumption of ’sin’ products,” Finance Assistant Secretary and spokesperson Antonio Joselito G. Lambino II said in a statement.
Cayetano, who chairs the Senate committee on ways and means, already sponsored Senate Bill (SB) No. 1074 in the plenary last Sept. 25. SB 1074 also calls for a further increase in excise taxes on heated tobacco and vaping products.
The DOF “will continue to extend the necessary technical assistance to help Sen. Pia preserve the rates in the Senate ways and means committee’s well-studied committee report, as plenary deliberations resume, hopefully as soon as the Senate comes back in session,” Finance Undersecretary Karl Kendrick T. Chua said.
Congress is on a break and will resume sessions next week.
“We are one with Sen. Cayetano in her push for significantly higher rates in alcohol excise taxes. Her analysis is correct that beyond the personal health costs, the socioeconomic costs of alcohol need to be mitigated. The massive economic costs of alcohol abuse justify significantly higher rates. For behavior to change meaningfully, the tax rates have to be high enough.” Chua added.
Dominguez earlier said SB 1074 was “well-studied” and had called on the Senate to pass the bill immediately.