AS the House Committee on Ways and Means started its hearing on a measure imposing excise tax on sugar sweetened beverages (SSBs), the Beverage Industry Association of the Philippines (BIAP) on Wednesday called for “nondiscriminatory” tax proposals on its beverage products.
This, after the Department of Finance (DOF) and government health agencies backed the proposal to impose tax on sweetened beverages.
During the lower chamber’s hearing, Joan Sumpio of the BIAP urged lawmakers to further study the impact of the proposal to the Filipino people.
“The BIAP supports the Duterte administration’s tax-reform efforts through fair and nondiscriminatory tax measures that would have broad-based positive impact for the country. However, some tax proposals have to be studied further to ensure that these would create more good than harm, particularly the current plans to levy a tax on sugar-sweetened beverages, such as House Bills 292, 3720 and 4005, all filed [in] the 17th Congress,” Sumpio told lawmakers.
While the bills on taxing sweetened beverages purportedly seek to curb the risk of developing obesity and other health-related problems, Sumpio, however, said the proposed taxes would only serve to unduly burden “those who can least afford such an increase, while achieving nothing of real significance to address the health angle it purports to target.”
“It is important to note that the beverages that will be affected by the proposed tax are those consumed by the majority of Filipinos, particularly those in the lower socioeconomic classes,” she said.
Sumpio, citing the latest Family Income and Expenditure Survey of the Philippine Statistics Authority, said close to 40 percent of the income of an average family is spent on food and nonalcoholic beverages.
“Items like coffee, juice and soft drinks will become more expensive for ordinary Filipino consumers, and any upward adjustment in prices of these beverages would impact their purchasing power,” Sumpio added.
Any tax proposals on sweetened beverages, he said, will not generate the additional revenue promised.
“BIAP member-firms employ over 30,000 workers, and for each direct job in a BIAP member-firm, an additional six to 10 other people are employed in secondary, support or allied services. It would lead to job losses within the beverage industry and, in turn, among small- and medium-sized retailers who sell sweetened beverages,” she said.
“Worse, it would likely fall short in terms of revenues raised due to industry job losses and foregone retail sales. Most important, these house bills would not solve the Philippine obesity and diabetes challenge,” Sumpio added.
Culprit
Also, the BIAP official said obesity and diabetes are multifactorial, as these are triggered by personal choices and is, therefore, not directly caused by a single factor, much less a single type of food or drink.
“A typical Filipino meal, based on the 2013 National Nutrition Survey of the Food and Nutrition Research Institute, consists mainly of the staple rice and food that are high in fat. This constitutes the lion’s share of calorie intake,” Sumpio said.
“Sweetened beverages are not a regular fixture in many Filipinos’ daily meals. In fact, sugar and syrup represent less than 2 percent of the daily caloric intake in a typical Filipino diet. Singling out sweetened beverages as the sole cause, and taxing these beverages then will not be an effective deterrent to fight the obesity and diabetes challenge in the country,” she added.
Moreover, the BIAP official said discrimination against sweetened beverages without regard to the other food and beverage components of a people’s diet will negatively affect the future of the beverage industry and allied industries, such as sugar, packaging, marketing and advertising sectors.
“Consequently, a stagnant growth in any of these industries would lead to economic slowdown and imperil the jobs and livelihoods of millions of stakeholders,” she said.
The players
The Beverage Industry Association of the Philippines is the umbrella organization of firms engaged in the manufacture, distribution, marketing and selling of beverages in the country. BIAP counts as members some of the country’s top corporations, such as Pepsi Cola Products Philippines Inc., Coca-Coca Philippines, Coca-Cola Femsa Philippines, San Miguel Corp., Mondelez Philippines, Universal Robina Corp., Asia Brewery, Nestlé Philippines, Liwayway Corp., Kopiko, Del Monte Philippines, Asiawide Refreshment Corp. and Zest-O Corp.
For his part, Finance Undersecretary Karl Kendrick Chua said the finance department is fully supporting the proposal, as it is eyeing the bill as one of the offsetting measures to make up the foregone revenues from the comprehensive tax-reform package. “We fully support the bill to increase excise tax on sugar-sweetened beverages,” Chua said.
In House Bill (HB) 292, Partido Demokratiko Pilipino-Laban Reps. Horacio Suansing Jr. of Sultan Kudarat and Estrellita Suansing of Nueva Ecija said their bills seeks to impose an excise tax of P10 on sugar-sweetened beverage per liter of volume capacity to generate additional revenues for the government and promote public health and wellness.
HB 292 seeks to impose an excise tax on sugar-sweetened beverages by inserting a new Section 150-A in the National Internal Revenue Code of 1997, as amended. The new Section 150-A, titled Sugar Sweetened Beverages, provides, “There shall be levied, assessed and collected on sugar-sweetened beverages per liter of volume capacity an excise tax of P10. The rate of tax imposed under this section shall be increased by 4 percent every year thereafter effective on January 1, 2017, through Revenue Regulations issued by the secretary of finance.”
Categories
The bill defines sugar-sweetened beverage as “a nonalcoholic beverage that contains caloric sweeteners/added sugar or artificial/noncaloric sweetener. It may be in liquid or solid mixture, syrup or concentrates that are added to water or other liquids to make a drink.”
Sugar-sweetened beverages include a) soft drinks, soda, pop and soda pop, which are nonalcoholic, flavored, carbonated or noncarbonated beverages; b) fruit drinks, punches or ades, which are sweetened beverages consisting of diluted fruit juice; c) sports drinks, which are beverages designed to help athletes rehydrate, as well as replenish electrolytes, sugar and other nutrients; d) sweetened tea and coffee drinks, which are teas and coffees to which caloric and noncaloric sweeteners have been added; e) energy drinks, which are carbonated drinks that contain large amounts of caffeine, sugar and other ingredients, such as vitamins, amino acids and herbal stimulants; and f) all nonalcoholic beverages that are ready-to-drink and in powder form with added natural or artificial sugar. The bill excludes the following from the scope of the Act: 100-percent natural-fruit juices; 100-percent natural-vegetable juices; yogurt and fruit-flavored yogurt beverages with pure fruit and vegetable juice or concentrate; meal-replacement beverages (medical food), as well as weight-loss product; and all milk products, infant formula and milk alternatives, such as soy milk or almond milk, including flavored milk, such as chocolate milk.
source: Business Mirror
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