Additional tax take from sweetened drinks, salty foods to boost 2024 budget -DBM chief

MANILA, Philippines — The increase in the proposed 2024 national budget is made possible by the expected revenue from the planned imposition of additional taxes on sweetened beverages and salty junk foods earlier than scheduled, Budget Secretary Amenah Pangandaman revealed on Wednesday.

Pangandaman said this at the Kapihan sa Manila Bay forum, noting that originally, they were only expecting a 9.2-percent increase in the proposed 2024 budget from the P5.268 trillion budget in 2023. However, they were able to bump it up to a 9.5-percent increase during the last Development Budget Coordination Committee (DBCC) meeting given the latest revenue measures being proposed by the government.

The Department of Budget and Management (DBM) chief earlier said they would propose a P5.768- trillion budget for 2024.

Pangandaman said the DBCC, in an earlier meeting, initially set the 2024 budget increase at 9.2 percent.

“But during our DBCC (meeting) two weeks ago,  yung mga revenue measures po ng DOF (Department of Finance) … for sweet and salty food and beverages supposedly po, 2025 pa yan magki-kick in. But what they did is they will advance it to 2024,” she added.

(But during our DBCC meeting two weeks ago, the revenue measures of the DOF showed that its revenue measures for sweet and salted food and beverages — which was supposedly intended to kick in by 2025, what they did is they will advance their implementation to 2024.)

Pangandaman said the government was planning to push for a measure that would advance the implementation of these planned revenue measures.

Currently, the tax on sweetened beverages is P6 per liter, as mandated by the Tax Reform for Acceleration and Inclusion (TRAIN) Law enacted in 2017. However, the latest wave of proposed taxes would expand the coverage of the tax to include more beverages with sugar and salty food products.

READ: BIR issues rules on excise taxes on sweetened beverages

“So they have now — when the Congress opens — until the end of the year to push for the new revenue measures,” she noted.

In an ambush interview with reporters after the forum, Pangandaman allayed fears that the proposed taxes might put an additional burden to consumers, saying it would allow the government to generate revenues while keeping the population healthy at the same time.

“Parang sin taxes ‘yan, may health component, we want people to lessen their consumption of such. ‘Yong sugar, I think that’s fine, you know that’s the number one disease sa atin …diabetes. And then ‘yong sa salt, from what I know, hypertension, high blood, and so on,” Pangandaman stressed.

(It’s like the sin taxes, there is a health component, we want people to lessen their consumption of such. Regarding sugar, I think that’s fine, you know that the number one disease in the country is diabetes. And then on salt, from what I know, it causes hypertension, high blood, and so on.)

“If you have a high number of these diseases, there is a higher requirement for the government to care for the population. So I think it makes sense, you increase your revenue and at the same time you help the population to be healthier, and usually in these cases what happens is that there’s earmarking, maybe for PhilHealth or other health-related programs,” she said.

Earlier, Pangandaman said they were nearing the completion of the 2024 National Expenditures Program (NEP) — which would be presented to the cabinet officials on Thursday afternoon.

Once the proposed budget is approved, the NEP can be printed out. Pangandaman said they can submit the proposed budget to Congress days after President Ferdinand Marcos Jr. delivers his second State of the Nation Address on July 24.

This is quicker than the submission made by DBM in 2022 for the then proposed 2023 budget, which was sent to the House of Representatives in August 2022.

READ: Palace: DBM to submit proposed 2023 budget to Congress on Aug. 22

READ: House formally receives proposed 2023 budget from DBM

As with the sugar tax, a bill is currently lodged in Congress calling for the implementation of the additional tax. According to Anakalusugan party-list Rep. Ray Reyes, taxes from sweetened beverages and food products can contribute to the implementation of the Universal Health Care (UHC) Act.

READ: More taxes eyed to raise funds to implement UHC Law

READ: DOH seeks higher taxes on sweetened beverages, junk food