Protests hit proposal to hike beverage taxes

A farm worker carries harvested sugarcane at Hacienda Luisita. E.I. REYMOND OREJAS/ INQUIRER

BACOLOD CITY, Philippines—The sugar industry and several congressmen are opposing a House bill that seeks to impose taxes of P10 per liter on beverages with sugar and other sweeteners and which would increase these taxes by 4 percent each year starting on Jan. 1, 2017.

Enrique Rojas, president of the National Federation of Sugarcane Planters, called on sugar industry leaders and congressmen from Negros Occidental province and other sugar-producing provinces to stand as one in opposing House Bill 3365, authored by Nueva Ecija Rep. Estrellita Suansing.

“We need to make our voices heard so that our national leaders will understand the plight of the sugar industry, particularly the tens of thousands of marginalized sugar farmers who will be further burdened by this proposed tax,” said Rojas.

Antipoor

“Our planters are already burdened by value-added tax and creditable withholding tax. Now they want to impose additional burden on us with this so-called soft drink tax. We cannot absorb this proposed tax which is simply excessive and unfair,” Rojas said.

Rep. Alfredo Abelardo Benitez of Negros Occidental’s third district said he and other congressmen are against the bill because it is antipoor.

Rojas said he has been getting calls from planters, not just in Negros Occidental but also from their member-associations in Luzon, the Visayas and Mindanao.

“They are all complaining about this bill. All of them are saying this tax will deal a harsh blow on the sugar industry which is already reeling from the effects of regional trade liberalization,” Rojas said.

He said manufacturers of soft drinks, juices and tea will not pass on the tax to their customers because they do not want their customers to stop buying their products. Obviously, they will insist that sugar producers bear the burden of the proposed tax.

The proposed tax is said to be a health and revenue generating measure. It aims to reduce consumption of sugar and sweeteners which, according to the bill, causes obesity, diabetes and other ailments. The tax is also expected to generate P35 billion annually for the government.

‘Illusion’

“They are absolutely wrong on both counts,” said Rojas. “There is no study which shows that diabetes and obesity are caused solely and exclusively by sugar consumption. Moreover, the projected P35 billion revenue is an illusion,” he said.

“Imposition of the proposed tax on sweetened beverages will result in lower sales for manufacturers and sugar producers,” he said.
A drop in sale of soft drinks would translate to lower tax collection for the government. Worse, reduced sales will result in mass layoffs of workers, he added.

“Government wants us to be competitive, yet it imposes numerous burdensome taxes on sugar farmers. In other countries, sugar producers are not taxed but are provided with subsidies by their governments. How can we compete against them?” Rojas said.