Beverage industry opposes softdrinks tax

ABS-CBN News

Posted at Dec 09 2014 01:20 PM | Updated as of Dec 09 2014 09:20 PM

MANILA, Philippines - The country's biggest beverage companies are opposing a measure seeking to impose new taxes on softdrinks and carbonated drinks.

In a statement, the Beverage Industry Association of the Philippines (BIAP) debunked claims of the bill's proponents that the softdrinks tax would generate additional tax revenues for the government.

The BIAP is composed of 18 companies, including Asia Brewery Inc., Coca-Cola Bottlers Philippines, Inc. and San Miguel Brewing Group.

The group noted that imposing new taxes on softdrinks and carbonated drinks would lead to a decrease in tax revenues.

The BIAP cited a report by the International Tax and Investment Center (ITIC), which indicated that introducing new taxes would likely reduce the beverage industry's corporate income taxes and other employment related taxes, which are paid by producers, wholesalers, and retailers.

It was not known if the ITIC report was commissioned by the BIAP or one of its members.

"We are model corporate citizens and to impose a tax on softdrinks and carbonated drinks at this critical hour is unwise, unfair, and sends a clear negative signal to foreign and local corporations that will discourage future investments in the country," BIAP said.

The BIAP issued the statement as the House of Representatives considers House Bill 3365, filed by Rep. Estrelita Suansing which proposes the imposition of a 10 percent ad valorem tax on softdrinks and carbonated drinks.

The measure, BIR chief Kim Henares, said would generate around P14 billion in revenues annually.

The BIAP noted that if HB 3365 is passed into law, the jobs and livelihood of millions of Filipinos in the beverage industry would be in danger. It noted around 25,000 people are employed in the beverage manufacturing sector, not including the thousands employed as truckers/logistics providers and retailers.

The BIAP also said the measure will hurt over 1.2 million micro entrepreneurs who are dependent on the beverage industry.

"Instead of taxing luxury goods, this bill seeks to impose taxes on basic commodities that are within the reach of the middle, lower middle, and lower income classes. Viewed in this light, it is obvious that the bill, effectively, is an anti-poor legislation,” BIAP said.