Proposed tax on sugar-sweetened beverages fails to pass initial Senate scrutiny

Sherrie Ann Torres, ABS-CBN News

Posted at Jun 15 2017 08:57 PM

MANILA - The proposed additional tax on sugar-sweetened beverages failed to pass initial scrutiny of the Senate Committee on Ways and Means Thursday.

Speaking to reporters after a five-hour hearing, committee Chair Sen. Sonny Angara said he found the proposed P10 per liter excise tax for local sugar and P20 per liter for imported sugar quite high.

He said the proposed two-tier tax system for the commodity would also be considered “illegal." If passed by the Senate, this may bring the Philippines into trouble with the World Trade Organization and possibly court trade retaliation from other countries.

The lawmaker asked the Department of Finance (DOF) to make revisions on the proposal and give it back to the committee for a fresh look. The lawmaker aims to sponsor the bill for plenary debates by September. 

“Ang two-tier parang, ang karamihan ng eksperto ang opinyon 'eh iligal 'yun, especially kung ang basehan ay galing sa ibang bansa. Talagang magkakaroon tayo ng problema sa World Trade Organization dahil pirmado tayo dun at magkakaroon ng gantihan, gaganti sa atin yung ibang bansa. 'Yung ating local na industriya naman ay baka matamaan,” he said.

If approved, the sugar tax, as originally proposed, would raise prices of sweetened beverages by 50 percent, Angara said. 

For the lawmaker, additional tax on sugar-sweetened beverages, such as soda and powdered drinks, should be based on the sugar content, not the volume of the drink.

He said it was important to study existing tax systems in other countries.

Angara has yet to decide whether he would consider the proposal a “health measure,” and not a “revenue bill”.

“Sa ngayon, tingin namin medyo hilaw pa kaya nga pinapaaral namin sa DOF 'yung ibang alternatibo. Kung ano 'yung maganda,” he said.

Still, Angara emphasized the need to encourage people, especially children, to choose healthy drinks instead of sugary products such as soda, known to cause health problems.