MANILA -A trade group of food manufacturers and distributors is urging the government to reconsider its plan to increase excise taxes on sweetened beverages, adding to the growing call from the private sector that warned of the negative impact of such a move.
In a statement released on Tuesday, the Philippine Chamber of Food Manufacturers Inc. (PCFMI) called on the Marcos administration to review this plan, highlighting the potential negative repercussions of the tax policy and emphasizing the importance of exploring alternative interventions in its goal to promote health.
PCFMI, which represents more than a hundred food products manufacturers and distributors, expressed concern, calling the move “regressive” and “discriminatory.”
It added that the proposed tax changes might hinder sector competitiveness, reduce incomes, and negatively impact the national treasury.
“As businesses continue their recovery from the pandemic’s impact, it is crucial to support economic revitalization through sound fiscal policies. We draw attention to the potential inflammatory impact of such a tax measure,” said the group.
The PCFMI added that the proposed hike in excise tax could lead to further increases in the prices of sweetened beverages and disproportionately target vulnerable segments of society, thereby exacerbating existing economic challenges.
“There is also a risk that consumers may turn to cheaper, untaxed alternatives, potentially fostering illiterate trade and compromising public safety,” said the PCFMI.
Further, the trade association questioned the health goals of the tax proposal, citing that health authorities like the Centers for Disease Control and Prevention have long recognized that issues like obesity are influenced by multiple factors, such as environment, social and economic conditions, and individual behaviors.
“While (sweetened beverage) taxes were initially presented as a preventive health measure to address products allegedly linked to increased rates of obesity and diabetes, no studies have yet demonstrated their impact five years since the (Tax Reform for Acceleration and Inclusion) package was enacted into law,” the group said.
The PCFMI proposed that a comprehensive and scientifically based study be conducted to determine the root cause of obesity and other non-communicable diseases.
This latest statement from the PCFMI follows a similar call almost two weeks ago from a coalition of foreign business chambers which issued their own public statement about the move.
The Joint Foreign Chambers of the Philippines (JFC), a coalition of the American, Australian-New Zealand, Canadian, European, Japanese, Korean business chambers, as well as the Philippine Association of Multinational Companies Regional Headquarters Inc, highlighted the tax hike’s economic impact, particularly on micro and small enterprises.
Under the tax measure, the increased tax for sweetened beverages under the TRAIN Act will be raised to P12 per liter, or double the current level, regardless of the type of sweetener used in these products.
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