MANILA - Incoming Finance Secretary Carlos "Sonny" Dominguez said he is mulling over the imposition of additional taxes on junk food to discourage its consumption, promote health and boost government revenues.
Dominguez defined "junk food" as food items with low nutritional value and are harmful to one’s health.
"Taxes on food items that cause obesity and disease are in our sights. If a product causes health issues, I think people should be discouraged from using it," Dominguez said.
No to VAT increase
Meanwhile, Dominguez thumbed down the proposal to raise value added tax to 14 percent from the current 12 percent.
Dominguez said the move would hit the poor and those in the lower income brackets harder than the higher income earners.
"I am not really in favor of that. People would say it is the easiest way of raising money. But is it really the fairest way to the Filipino public?” Dominguez said.
Increasing VAT by 2% and expanding the VAT base by removing exemptions are part of the Comprehensive Tax Reform Package being pushed by President Aquino's economic team.
Along with other measures, it is projected to give the government fresh revenues of at least P164.5 billion, even with a 7% reduction on income tax rates and 5% reduction on corporate income tax.
Dominguez also believes it is about time for another tax amnesty. This gives erring taxpayers a clean slate to begin paying their taxes dutifully after being granted amnesty.
“We have to evaluate the implications of that. Off hand, it sounds very attractive. Saying, 'Ok, what you did in the past is forgiven and now we will start anew,'" Dominguez said.
Dominguez’s team is expecting to complete their proposed tax reform agenda in September.