Senate rejects Recto proposal to cut excise tax on sweetened drinks

With a close vote of 7-8, the Senate on Wednesday night rejected the motion of Senate President Pro Tempore Ralph Recto to cut the proposed excise tax on sugar-sweetened drinks.

Recto proposed that P3 per liter of volume capacity be levied on all sweetened beverages, except for milk and 3-in-1 coffee.

“This is probably the most controversial issue in the bill, sugar. In the first place, maraming matatamaan dito, you include sari-sari stories, you include the D&E consumers who consume those products the most,” Recto argued.

“If we were serious in taxing sugar, we tax it in the plant,” he said.

Under the Senate version of the tax reform proposal, a tax of P5 per liter of volume will be levied on sweetened drinks using purely caloric sweeteners, P10 on drinks using purely high fructose corn syrup or in combination with any caloric or non-caloric sweetener, and P3 per liter on drinks using purely non-caloric sweeteners or a mix of caloric and non-caloric sweeteners.

Senator Sonny Angara, chairman of the Senate ways and means committee, then proposed during the period of amendments to increase the P3-per-liter provision to P5 per liter.

“The P5 is the sweet spot because at 20-percent tax, the price is enough to change behavior so that’s what the health comes in. If it’s too low, you’re not changing behavior,” Angara said, emphasizing that imposing taxes on sweetened drinks is both a revenue and a health measure.

The Recto amendment lost in a close vote of seven senators in favor and eight against, including Senate President Aquilino “Koko” Pimentel III.

The proposed first package of the tax reform measure aims to lower income taxes while limiting value-added tax exemptions, adjusting excise taxes on oil and automobiles, and imposing new taxes on sugar- sweetened beverages. — RSJ, GMA News