MANILA - The government will tax some sugar-sweetened drinks starting next year, with the twin aims of raising revenue and fighting obesity.
Drinks with caloric and non-caloric sweeteners will be taxed P6 per liter while those using high-fructose corn syrup, a cheap sugar substitute, will be charged P12 per liter. The rates were revised from the original proposal of P10 per liter.
The tax on sugary drinks is among duties that are meant to offset a reduction in personal income tax rates, which will also take effect next year under the first package of reforms that President Rodrigo Duterte signed into law on Dec. 19.
All milk, whether powdered, ready-to-drink, flavored or fermented, will be excluded from tax, as well as ground and 3-in-1 coffee and 100-percent-natural fruit and vegetable juices, meal replacements and medically indicated drinks, and beverages sweetened with stevia or coco sugar.
The World Health Organization says fiscal policies that cause the price of sugary drinks to increase by 20 percent can discourage consumption, helping reduce obesity, type 2 diabetes, and tooth decay.
Beverage firms, such as Coca-Cola FEMSA, the world's largest franchise bottler of Coke products, have warned that taxing sweetened drinks could stoke inflation and hurt manufacturers, sugar farmers and small retailers.