Beverage industry seeks Senate sympathy for tax on sugary drinks

The Beverage Industry Association of the Philippines (BIAP) on Thursday called on the Senate to reduce the proposed tax on sugar-sweetened beverages (SSBs), claiming that higher excise taxes on such products would "disrupt" the industry moving forward.

"Let's please calibrate and make sure we balance the whole thing and not disrupt one established industry in the Philippines," Ernesto S. Mascenon of the BIAP said during the Food and Beverage For All forum in Parañaque City.

House Bill 5636 or the Tax Reform for Acceleration and Inclusion Act (TRAIN) was approved by the House of Representatives in May.

The bill, which still needs to go through Senate scrutiny, is being pushed by the Duterte administration as "health measure," seeks to impose a P10 excise tax per liter of sugar-sweetened beverages.

If the measure is approved by the Senate in its present form, the result would be a sharp decline in business revenue, Mascenon said, citing data from the University of Asia and the Pacific (UA&P).

"If prices go up, this business will not be stable. Even at P5 per liter increase, the prices of these goods will still go up by a very hefty amount," he said.

"It's really going to impact on business," he added.

According to Mascenon, with the increase in excise taxes on SSBs, not only the sugar industry but also the coffee industry will be affected.

Sugar farmers will lose 33 percent in revenues while the coffee industry will lose 75 percent, he noted.

The Senate should be open to the appeal of the beverage industry, Mascenon said.

"We have gained traction on this one. Some senators have agreed to take a look on this one, but the fight is not over," he said.

The BIAP is open to imposing excise taxes on sugar products, based on sugar content.

"Move away from volumetric tax to a sugar content-based tax. The more sugar you put in the product, the more tax it should command," Mascenon said.

"Over a period of time, we reduced the amount of sugar in our products," he added. — VDS/KVD, GMA News