The chairman of House Committee on Ways and Means on Wednesday said the lower chamber will approve a measure imposing an excise tax of P10 on sugar sweetened beverages before the year-end.
Liberal Party Rep. Romero S. Quimbo of Marikina, the panel chairman, said the excise tax of P10 on sugar-sweetened beverages (SSBs) per liter of volume capacity aims primarily to develop a healthier population and provide an additional revenue of about P34.5 billion for the government.
“We will approve it before our [Christmas] break [on December 19]. It’s an important health measure where many of the poor become victims of this cycle of malnutrition and obesity. We need funds to develop sources of potable water for our public school and ordinary communities,” Quimbo said in a text message.
On Tuesday the committee approved the substitute bill to House Bill 3365 authored by Unang Sigaw Rep. Estrellita B. Suansing of Nueva Ecija after more than a year of hearings and meetings on the measure.
Quimbo stressed that the bill is a health measure more than anything else.
“We’ve come to determine that many of the diseases or noncommunicable diseases emanate from the consumption of this readily acceptable commodity [sugar sweetened beverages] especially by our children so the proceeds will serve not only as additional revenue for the government but, more important, to develop really a healthier population,” Quimbo said.
According to Quimbo, this can be done by first creating sources of potable water in school and in communities and secondly, by raising the educational awareness of the population in terms of healthier lifestyle, as well as consuming healthy food and drinks.
The bill imposes an excise tax on SSBs by inserting a new Section 150-A in the National Internal Revenue Code of 1997, as amended. Section 150-A titled Sugar Sweetened Beverages provides there shall be levied, assessed and collected on sugar-sweetened beverages per liter of volume capacity, an excise tax of P10. The rate of tax imposed under this section shall be increased by 4 percent every year thereafter effective on January 1, 2017, through revenue regulations issued by the secretary of finance.
The bill defines SSB as “a nonalcoholic beverage that contains caloric sweeteners/added sugar or artificial/noncaloric sweetener. It may be in liquid or solid mixture, syrup or concentrates that are added to water or other liquids to make a drink.”
The SSB shall include: soft drinks, soda, pop and soda pop; fruit drinks, punches or ades; sweetened beverages of diluted fruit juice; sports drinks; sweetenwwed tea and coffee drinks; energy drinks; all nonalcoholic beverages that are ready-to-drink and in powder form with added natural or artificial sugar.
It excludes the following: 100-percent natural fruit juices; 100-percent natural vegetable juices; yogurt and fruit-flavored yogurt beverages with pure fruit and vegetable juice or concentrate; meal-replacement beverages (medical food) and weight- loss products; and all milk products, infant formula and milk alternatives, such as soy milk or almond milk, including flavored milk, such as chocolate milk.
In terms of allocation of the revenue collection from the excise tax on SSBs, the bill provides that 50 percent shall go to the General Fund; 20 percent to the Department of Health for the provision of medicine and medical assistance to indigent patients with diabetes and or other related diseases through the provincial or district hospitals, and for health and wellness information campaign; 20 percent to the Department of Education to provide access to potable water in public schools (water fountain) and sports facilities and for the community-based obesity, diabetes, dental caries prevention campaigns and other diet-related health-awareness programs using educational, environmental, policy and other public health approaches.
Earlier, Visayan Bloc Leader and Rep. Alfredo Benitez of Negros Occidental said that additional tax on sweetened beverages would adversely affect the livelihood of sugar industry workers.
“Sugar is not the culprit in the rising obesity and diabetes problems of rice-eating Filipinos,” said Benitez, chairman of the House Committee on Housing and Urban Development.
In their letter to Quimbo, sugar industry leaders said that while there remains no local findings pointing to sugar as the cause of diabetes and obesity among Filipinos, proponents of the measure should instead determine the link between rice to the health issues they raised against sugar.
The letter was signed by Rafael Coscolluela, president of the Confederation of Sugar Producers Associations Inc.; Enrique Rojas, president of the National Federation of Sugarcane Planters Inc.; Manuel Lamata, president of the United Sugar Producers Federation of the Philippines; Danilo Abelita, president of the Panay Federation of Sugarcane Farmers Inc.; and Francisco D. Varua of the Phlippine Sugar Miller Association.
The industry leaders also aired fears that the new tax will trigger an increase in prices of softdrinks and carbonated drinks and will result in the “contraction of the market of refined sugar” and could result reduction of purchases of refined sugar.