The Philippine Association of Sugar Refiners Inc. (PASRI) is urging President Ferdinand Marcos Jr. to withhold support of the plan to impose higher taxes on sugar-sweetened beverages (SSB) and to instead strongly oppose the proposal to increase indirect taxes on sugar.
PASRI president Renato Cabati, in a letter to President Ferdinand Marcos Jr. dated July 7, cited Secretary Benjamin Diokno’s announcement that the Department of Finance intends to increase the sweetened beverage tax rate under Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law to PHP12 per liter, regardless of the type of sweetener used.
The proposal aims to fund newly initiated socio-economic programs, such as the food stamp program of the Department of Social Welfare and Development, Cabati said.
Cabati said PASRI supports the government’s efforts in implementing various poverty alleviation programs, but is against the plan to generate additional funds for these by imposing higher taxes on sugar-sweetened beverages.
He pointed out that after taking effect in 2018, the TRAIN law has provided the national government earnings of about P40 billion a year from the excise taxes on SSBs.
Notwithstanding this huge contribution by the sector, reports about inefficiencies in tax collection by the government continue to persist. Addressing these inefficiencies within the revenue collection presents a win-win solution where the much-needed revenues are raised while avoiding the imposition of an additional tax burden on an industry which can ill afford it at this critical time, Cabati said.
Since the imposition of the sweetened beverage tax, the industry has experienced a continuous downward trend in sugar consumption in the country – from a per capita consumption of 35.99 kilograms in 2017 to 28.98 kilograms in 2022, Cabati also pointed out.
The decline in sugar consumption continues even as the economy is recovering from the pandemic, he said.
“Any increase in the SSB tax, particularly on sugar, will – without any exaggeration – lead to the demise of our local sugar industry and affect millions of Filipinos – mostly in the rural areas – that are dependent on sugar for livelihood, income, and employment, Cabati said.
Cabati said despite a substantial decrease in per capita sugar consumption, noncommunicable diseases (NCDs), which the DOF cites as one of the reasons for proposing an increase in SSB taxes, remain to be a major problem in the country.
This only indicates that the health programs of government have not addressed other causal factors to the problem, he said.
During the deliberations in Congress about the imposition of excise taxes on SSBs, health experts unanimously agreed that NCDs are caused by multiple factors. These factors include genetic origin, lifestyle, diet (especially preference for fast foods), limited choices/expensive food, among others, Cabati said.
“There is no evidence that the implementation of SSB tax has helped improve consumer access to nutritious foods, or reduced obesity and diabetes in the Philippines. Thus, increasing yet again the excise tax on beverages using sugar unfairly and erroneously singles it out as the cause and solution to a health challenge in need of multidimensional interventions”, he said.
The Philippine Sugar Millers Association is also opposing an increase in the excise tax on sugar-using beverages.*