‘DOF tax hike bid on sugary drinks favors imported sweeteners’

INQUIRER.net stock images

MANILA  -The Philippine Sugar Millers Association (PSMA) escalated to President Marcos its appeal to reconsider the Department of Finance’s (DOF) proposal to double excise taxes on sweetened drinks as this would severely affect the local sugar industry.

In a letter to Mr. Marcos, PSMA president Pablo Lobregat said raising the tax on sugar-using beverages would only promote the usage of high fructose corn syrup (HFCS) and the entire local food industry won’t benefit from this.

“In effect, the proposed increase in SSB (sugar sweetened beverage) tax on sugar will benefit a small segment of beverage manufacturers—composed of multinational corporations—at the expense of Filipino farmers and workers who are saddled with a higher sugar excise tax rate,” the letter said.

The PSMA said the proposal to raise the tax rate on sweetened beverages to P12 per liter and equalize it with the tax rate on HFCS signals a “significant shift” in policy from promoting and supporting locally produced sugar to favoring the use of imported sweetener.

HFCS is an artificial sugar made from corn syrup. The PSMA said it was used as sweetener primarily and only in beverages, and not in the production of food products such as bread and pandesal.

It is entirely imported at significantly cheaper prices mainly due to government subsidies to corn production by HFCS exporting nations, unlike sugar which is produced by farmers and workers in the provinces, the group noted.

“The higher tax rate for beverages with HFCS discourages their consumption because of health risks attributed to the sweetener, evidenced by the growing number of health-conscious consumers in the United States and Europe preferring beverages sweetened with sugar instead of HFCS,” Lobregat said in the group’s July 6 letter to the President.

“The lower tax rate on sugar-using beverages encourages the continued use of sugar but likewise ensures government revenue from the SSB regardless of the sweetener that the beverage uses,” he added.

An increase in excise taxes on sweetened beverages is not due until 2025 under the Tax Reform for Acceleration and Inclusion (Train) law enacted in 2017.

The law levies an excise tax of P6 per liter on beverages using caloric and noncaloric sweeteners while drinks with HFCS (entirely or combined with sugar or other sweeteners) are subject to an excise tax of P12 per liter.

The DOF wants a tax hike to fund the 2024 budget. INQ

RELATED STORIES:

Tax on junk food, higher soft drink levy pushed

Consumers raise howl over junk food tax hike