'Healthy Tax' bill to be filed next year, finance dept says


Posted at Sep 29 2016 02:05 PM | Updated as of Sep 29 2016 03:08 PM

MANILA - The Department of Finance will file early next year a bill seeking to tax sugary drinks and raise levies on tobacco and alcohol products, an official said.

The "Healthy Tax" bill will supplement a comprehensive tax reform package submitted this week, which seeks to lower income taxes for the middle class while removing some value added tax exemptions.

"It is going to be a healthy tax. It is a tax reform for healthy Philippines," finance undersecretary and chief government economist Karl Kendrick Chua said late Wednesday.

Chua said filing the measure next year would allow the existing Sin Tax Law to mature. The final tranche of increases in tobacco and liquor taxes under the measure will be implemented next year.

The government is considering imposing a P10 per liter tax on sugar-sweetened beverages regardless of whether it is in liquid or powdered form. It will cover softdrinks, energy drinks and sweetened teas and coffees, Chua said.

For tobacco products, Chua said the finance department was looking at setting the excise tax rate to at least 50 percent of retail price.

"The reality is even with the sin tax, our excise burden for the cigarettes is still one of the lowest in the world and also in the region. The World bank and international organizations typically, they want to see the excise to be at least half of the retail price," Chua said.

Finance Secretary Carlos Dominguez had said taxing sugary drinks is part of President Rodirgo Duterte's creative ways of raising revenue while promoting public health.