The House of Representatives is now seriously considering the passage of proposals imposing “sin” taxes on salty products and adjusting the current excise taxes on alcoholic beverages.
Nationalist People’s Coalition Rep. Scott Davies S. Lanete of Masbate and Deputy Speaker Sharon S. Garin of AAMBIS-OWA said their House Bills (HBs) 3719 and 4839, respectively, are both revenue and health measures.
The two bills are both under deliberations before the House Committee on Ways and Means.
In HB 3719, Lanete proposed the imposition of an excise of P1 on every milligram of sodium in excess of one-third of the allowable daily intake of sodium chloride as prescribed by the Department of Health.
These proposals are different from the Duterte administration’s tax-reform package, which seeks to lower personal income-tax rates; expand the value-added tax base; adjust excise taxes on petroleum and automobiles; imposing excise tax on sugar-sweetened beverages; and ease the rates of estate and donor’s taxes. The leadership of the lower chamber has already expressed confidence that tax package will be passed before its sine die adjournment on May 31.
“During the ancient times, salt was heavily taxed due to its importance in various cuisines and rarity. However, as civilization improved, salt became more and more available. Its ready availability placed it outside of states’ interest as subject of sin taxes. Thus, at present, it is no longer subjected to heavy taxes,” Lanete said.
“But nowadays, salt has acquired a new image. It is now treated as a silent killer as its consumption has a correlation with high blood pressure, which consequently leads to increased risks of having a heart attack and stroke,” he added.
Lanete said a significant number of countries have imposed sin taxes on salt to deter people from consuming it, saying it is also a way for these states to pressure their citizens into adopting a healthier diet.
Among the countries that impose heavy taxes on salt are Vietnam, Uganda, Tanzania, Suriname, Sri Lanka, Panama, Morocco, Kenya, Jordan and Cambodia.
The lawmaker, citing the 1987 Constitution, said the state shall protect and promote the right of health of the people and instill health consciousness among them.
“Thus, it is high time the Philippines adopted strict measures in ensuring the safety and well-being of Filipinos. Imposing a tax on the production, sale and consumption more than the prescribed daily intake will also generate additional funds for the government,” he said.
The proposal seeks to amend Republic Act (RA) 8424 by inserting a new provision that states all manufactured goods that have sodium chloride, or any of its derivatives, as an ingredient and which included, but are not limited to, canned goods, processed food and junk food, a tax of P1 shall be levied on every milligram of sodium in excess of one-third of the allowable daily intake of sodium chloride, as prescribed by the health department.
Under the bill, the Department of Finance, in coordination with other government agencies concerned, shall promulgate not later than 30 days from the effectivity of the act the necessary rules and regulations for the effective implementation of this measure.
Dr. Cecilia Cristina Acuin of the Food and Nutrition Research of the Department of Science and Technology has already backed the proposal, saying moderate consumption of sodium is needed.
“Salt is about 40-percent sodium. A teaspoon of salt [about 5 grams] contains about 2 grams of sodium, which is the recommended amount to be consumed in a day by a healthy adult. This amount would be much less in children, and even more so in infants,” Acuin told the Ways and Means Committee during the measure’s first hearing.
“It must be acknowledged, though, that salt is added for taste and safety—to reduce the microbial contaminant of food—as well as to extend the shelf life of food,” Acuin said.
Other sources of sodium in the diet, aside from salt, include monosodium glutamate or vetsin, sodium bicarbonate or baking soda, and baking powder, she added.
Acuin added that the food groups that contribute significantly to the sodium intake of Filipinos are fish, meat and poultry products that are canned and processed; fish, meat and poultry products that are minimally processed; baked products; and instant noodles.
In her House Bill 4839, Garin intends to bring the level of the sin tax imposed on alcoholic products on a par with the “heavily taxed” tobacco and cigarette products.
According to Garin, 70 percent of the total excise-tax collection came from tobacco and cigarette products, while only 30 percent was collected from alcohol products.
“This means that tobacco and cigarette products are heavily taxed than that of alcohol products because of health effects. Tobacco and cigarette products have adverse health effects, while alcohol is believed to have certain benefits when drunk moderately,” she said.
Lakas-CMD Rep. Prospero Pichay Jr. of Surigao del Sur, however, warned that an increase in taxes on alcohol products may subsequently reduce government revenue collection because of the expected decrease in alcohol consumption.
“This situation will ultimately defeat the purpose of the proposed law,” he said.
For his part, Deputy Speaker and Liberal Party Rep. Romero Quimbo of Marikina City said the lower chamber should determine first whether RA 10351, or the sin-tax reform law, was able to meet its objectives as a health-promotion and revenue-generation measure.
Under the bill, on distilled spirits, an ad valorem tax equivalent to 25 percent of the net retail price—excluding the excise tax and the value-added tax (VAT)—per proof and in addition to the ad valorem tax herein imposed a specific tax of P30 per proof liter.
In addition to the ad valorem tax herein imposed, the specific tax rate of P30 imposed under this section shall be increased by 5 percent every year thereafter, effective on January 1, 2018, through revenue regulations issued by the secretary of finance.
On wines, the bill said sparkling wines/champagnes, regardless of proof, if the net retail price per bottle of 750-milliliter volume capacity (excluding the excise tax and the VAT) is P500 or less, the tax shall be P300, while if more than P500, the tax shall be P800.
It also said for still wines and carbonated wines containing 14 percent of alcohol by volume or less, the tax shall be P40. Meanwhile, for still wines and carbonated wines containing more than 14 percent but not more than 25 percent of alcohol by volume, the tax shall be P70.
Under the bill, the said tax rates shall be increased by 5 percent every year thereafter, effective January 1, 2018, through revenue regulation issued by the secretary of finance.
On fermented liquors, which include beer, lager beer, ale and porter, the bill said if the net retail price (excluding the excise tax and VAT) per liter of volume capacity is P50.60 or less, the tax shall be P28 per liter.
It added if the net retail price (excluding the excise tax and VAT) per liter of volume capacity is more than P50.60, the tax shall be P30 per liter.