The impending tax law on sugar-sweetened beverages (SSBs), currently being studied by both houses of Congress, is seen to grossly impact the C, D and E classes of society.
Formerly known as the Comprehensive Tax Reform Package and now called the Tax Reform for Acceleration and Inclusion (TRAIN, or House Bill [HB] 5636), the latest proposal to impose taxes on SSBs has been an ongoing issue and various sectors are appealing to President Duterte to reconsider.
A news statement, quoting a study done by the Philippine Chamber of Food Manufacturers Inc. (PCFM), said the proposal to impose an excise tax of P10 per liter of volume capacity on sugar-sweetened beverages (SSBs) will not only be the highest in the world: It will also hit the poor the most.
If the TRAIN is approved and the proposed new tax is passed, a 3-in-1 coffee sachet, currently priced at P5, will be P8; a 1-liter bottle of juice concentrate currently priced at P9 will have a retail price of P30; a 1-liter bottle of tea currently priced at P20 will be P30; carbonated drinks currently being sold for P15 per liter, will cost P25; and a 1-liter tetra pack of ready-to-drink juice.
The products covered by the TRAIN, or HB 5636, will include all sweetened juice drinks; sweetened tea; sweetened coffee; all carbonated beverages with sugar, including those with caloric and noncaloric sweeteners; flavored water; energy drinks; sports drinks; powdered drinks not classified as milk, juice, tea and coffee; cereal and grain beverages; even nonalcoholic beverages with sugar.
The government’s vision for the TRAIN is to create “a tax system that is simple, fairer and more efficient, characterized by low rates and a broad base that promotes investment, job creation and poverty reduction.” However, this impending tax measure, based on the study of the PCFM is seen to increase prices of the usual commodities commonly purchased by the C, D and E classes of society. This has led to the ongoing sentiment that the TRAIN is now increasingly seen by those who will be directly impacted as anti-Filipino and anti-poor, specifically on sari-sari store owners, whose biggest income apparently comes from the selling of SSBs.
“A typical sari-sari store owner earns an average of P1,000 per day, 30 percent to 40 percent of the total, around P300 to P400, comes from the sale of coffee, juice and carbonated drinks, so almost half of our net income is from the sale of sweetened beverages. I therefore appeal to our good President, as well as to all our congressmen and senators, to please carefully reconsider the passing of this new tax measure into law or, at the very least, delay it until a better alternative is available,” Philippine Association of Stores and Carinderia Owners (Pasco) President Victoria Aguinaldo said.
“I think they need to revisit this proposal again and possibly make the necessary adjustments and improvements to ensure that it won’t be as detrimental to the poor, more specifically the sari-sari store and carinderia owners, as it is right now,” she added.
Based on the latest statistics on the number of registered sari-sari stores in the country, there are currently 1.3 million sari-sari stores nationwide. It is estimated that 91 percent of all retail stores in the country are sari-sari stores and to cite the latest statement of the Department of Trade and Industry (DTI), “Sari-sari stores form part of the economic backbone of the country. Providing them more opportunities can only mean greater economic development for our nation as a whole,” Trade Secretary Ramon M. Lopez said at a gathering held recently.
If the TRAIN is passed into law, it is feared that at least half of the current number of sari-sari stores nationwide will eventually close shop because it will no longer serve as a viable source of additional income for the family household. It will, therefore, directly or indirectly translate to around 133,750 jobs lost; an increase of 1.5 percent in the unemployment rate; a P20-billion decline in beverage sales; around a P2.4-billion loss in value-added tax; a P7-billion loss from affected industries; and more than P130- billion investment losses for the Beverage Industry Association of the Philippines.