Finance says milk exempt from tax, businessmen seek clarity


Posted at Aug 09 2017 04:03 PM | Updated as of Aug 09 2017 07:07 PM

MANILA - Milk is not included in the government's plan to tax sugar-sweetened beverages, a finance official said Wednesday, as an industry group sought a clearer wording of the measure.

The P10 per liter excise tax, as passed by the House of Representatives, will be imposed on softdrinks, juice drinks, bottled iced tea and energy drinks.

"Milk is not included," Finance undersecretary Karl Kendrick Chua said.

The Philippine Chamber of Food Manufacturers is seeking a rewording of the bill in succeeding versions to ensure that milk is excluded from the tax plan, according to its spokesman, Ricky Salvador.

Salvador said the House version listed 2 exemptions, one for milk products with "no added sugar" and another for "all milk products" including milk formula and chocolate milk.

He said the wording on first exemption would raise questions on tax coverage for milk products with added sugar, which comprise 98 percent of products sold, compared to the 2 percent with no added sugar.

"It’s a grey area. Yung pagkabasa, there are members who think na hindi kami kasama there are members na nagsasabi kasama," he said.

(If you read it, there are members who think that we are included, there are members who think that we're not.)

The tax on sweetened drinks, along with higher duties on fuel are among measures that are meant to offset a reduction in personal income tax rates.

President Rodrigo Duterte is overhauling the tax system to shift the burden to the ultra-rich from the middle class and raise funds for an P8-trillion infrastructure program. -- with a report from Michelle Ong, ABS-CBN News