Bill eyes tax on soft drinks; business group opposes it

Nueva Ecija Rep. Estrellita Suansing. Photo from https://www.facebook.com/athel.suansing

MANILA, Philippines — A solon wants to tax soft drinks in a bid to regulate its consumption to deter obesity and diabetes, but a business group warned of its negative impact on the country’s economy.

During Monday’s hearing of the ways and means committee in the House of Representatives, Nueva Ecija Rep. Estrellita “Ging” Suansing said taxing soft drinks won’t prohibit its sale in the market.

“We are just reducing the consumption because of its effects to health,” Suansing said.

Suansing’s House Bill 3365 seeks to impose a 10 percent ad valorem tax on soft drinks and carbonated drinks.

The tax collected would be allocated for victims of calamities under the bill, Suansing said, adding that she is also open to allocating it for health.

But Atty. Adel Tamano, who represents the Beverage Industry Association of the Philippines, said taxation on the sector will have a negative effect on the economy.

He said that taxing carbonated beverages would also result in reducing other tax revenues such as corporate income taxes and employment related taxes.

He said the beverage sector buys 60 to 70 percent of the produce of the local sugar industry.

Under the Aquino administration, the beverage sector has invested P46 billion to the economy, Tamano added.

He said the beverage sector employs over 25,000 people and 1.2 million micro entrepreneurs in the country.

“Taxation won’t solve the problem of obesity,” said Tamano, who once ran as senator in the 2010 elections but lost.

Tamano also said there is no study directly linking soft drinks consumption to illnesses such as diabetes.

“No one single beverage can be said to be responsible for making people overweight,” Tamano said.

For their part, Dr. Elizabeth Caluag of the Department of Health lifestyle related diseases division acknowledged that there is no study linking soft drinks consumption to obesity and diabetes.

But she said the DOH supports the measure as it will “limit access” to soft drinks.

Meanwhile, the ways and means committee is looking at amending the bill to require excise taxes on soft drinks instead of ad valorem taxes, the chairman Marikina Rep. Miro Quimbo said.

“(Excise tax) is easier to administer and less prone to abuse. In specific taxes, it is imposed at the plant site as the beverage leaves the factory. With ad valorem, it is based on selling price,” Quimbo said in a text message.

“(Ad valorem) is more difficult to monitor,” he added.

In 2012, Congress approved a bill imposing excise taxes on cigarettes and alcoholic drinks in a bid to increase the country’s revenues for universal health care.