Excise taxes on syrups, softdrinks to translate into losses

MANILA, Philippines - Collecting excise taxes on flavored and colored syrups and non-essential products like soft drinks would translate to economic losses, the Beverage Industry Association of the Philippines (BIAP) said. In a position paper submitted to the committee on ways and means of the House of Representatives, the BIAP said variety stores all over the country would lose P9 billion while the sugar industry would lose P2 billion. Traditional food outlets would also lose P2 billion while the packaging industry would lose P200 million. The BIAP is opposing House Bill 595 which is proposing a ten-percent ad valorem tax on flavored or colored syrups, and House Bill 5039 which seeks the rationalization of excise tax on nonessential goods. Both bills aim to raise revenues for the national coffers and protect the health of the citizens by discouraging consumption of sodas. "We are strongly opposed to HB 595 and HB 5039. The tax would cripple the beverage industry that continues to provide employment and economic opportunity to millions of Filipinos," the BIAP said. The BIAP said imposition of taxes on soft drinks would cut beverage sales by 17 percent as the price of an eight-ounce soft drink would rise P1.77 to P10.77. With the tax, a one-liter soda bottle would cost P4.43 more at P26.43. "Since consumers have very little disposable income, beverage companies are forced to keep the cost of products stable and are effectively absorbing the weight of taxes and other costs so that the market could continue to patronize soft drinks and other beverages," the BIAP said. The Philippine beverage industry has a network of 630,000 retailers composed of 525,000 sari-sari stores, 70,000 bakeries and small eateries, and 36,000 retail outlets. - GMANews.TV