Proposed tax on sugar sweetened drinks to be trimmed in half

The proposed P10 per liter tax on sugar sweetened beverages will be lowered by 50 percent and implemented under a three-tier system, Senator Edgardo Angara said Thursday.

"There’s a suggestion from some of the stakeholders to go for a volume-based tax at P5 (per liter)," Angara told reporters on the sidelines of the Senate committee on ways and means hearing on the proposed comprehensive tax reform program.

"But the drawback to that is that it does not distinguish between a beverage which has ... Meron lang siyang isang kutsarita, 'yung iba10 kutsarita – pareho ang trato mo," the senator added.

To address the issue, Angara said he is seeking a three-tier system to incentivize those who manufacture drinks with less sugar content.

"So it’s a bit blunt kung hindi siya targeted sa talagang sweetened. So we might look into the possibility of putting levels to distinguish better sweeter and beverages which are not so sweet," he said.

"It’s difficult to set the ... We want to get the consensus muna as to where the levels will be set. But, for the senators, they’re okay with the three tiers as long as the maximum level does not exceed P5 – equivalent of P5 per liter," he added.

Imposing an excise tax of P10 per liter is among the measures included in the House-approved version of the Department of Finance-proposed tax reform law.

"We want to incentivize them to manufacture drinks which are perceived to be healthier and contain less sugar. And that would veer away from the volume or at least it would suggest that you would have to put different levels so you can reward those who put less sugar in their beverages," Angara said.

If the Department of Health (DOH) will be amenable to trimming the proposed tax on sugary drinks, then the Department of Finance (DOF) will support it, Finance Undersecretary Karl Chua said

"Because it is a health measure, we will support," Chua said.

However, he said "if this is a revenue measure, hindi kami papayag. So health measure talaga siya."

Trimming the proposed P10 per liter levy will cut in half the expected P47 billion gains from the excise tax measure, Chua said.

"Well, I think, we should look at it the same way as the government is looking at it. They say it’s primarily a health measure but it’s weak," Angara said.

"It weakens its standing as a health measure that’s why we might have to put in ... look at the possibility of putting levels, meaning you exceed a certain amount of sugar, then maybe you can be P5, but if you don’t exceed, you can be below P5," the senator added. — VDS, GMA News