FPI calls tax on sugar-sweetened beverages anti-poor » Manila Bulletin Business

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By Bernie Cahiles-Magkilat

The Federation of Philippine Industries (FPI) said that imposing a 10 percent ad valorem tax on sugar- sweetened beverages is anti-poor, hiding behind the guise of health concern but sparing the rich.

Jesus Arranza

FPI Chairman Jesus Arranza said during a press conference that the proposed taxation on  sugar-sweetened beverages was not part of the original tax reform plan of the Department of Finance. The DOF, however, said they intend to include the sugar sweetened beverages but in Package 5 yet of the Comprehensive Tax Reform Program (CTRP).

Arranza noted that the proposed taxes on sugar-sweetened beverages only started when a Representative from the Lower House cited health issues affecting a relative.

“It is not a health issue anymore as it has become a revenue thing under the Comprehensive Tax Reform Program of the government,” he said.

Arranza pointed out that the poor are the most affected in this tax measure as they consumed more of this kind of beverages, which he called as food for the brain and are more popular among the less privileged.

Instead, Arranza has called for taxing all establishments, particularly coffee shops that sell sugar-sweetened beverages where the rich people frequent to buy their own sugar sweetened beverages.

“Why is Congress rushing it. I said no to this tax because that is not originally asked by the DOF,” he said.

In addition, Arranza emphasized that there are already many taxes that unduly burdening the local manufacturing industries, when the supposed needed government revenues could be raised by merely correcting the revenue leakage brought about by smuggling where the government is losing about P200 billion annually.

Arranza compared the sweet tax to the Sin Tax in its intention to lower the  consumption of products perceived to be unhealthy and harmful to a population’s overall health.

It is thus a combination of economic policy and health policy – a source of revenue and a health policy, and a deterrent. He noted that though revenues from sin taxes are envisioned to fund the administration’s Universal Health Care Program.

“However, are the products covered under the Sin Tax comparable with that of the Sweet Tax,” he asked.

Sugar-sweetened beverages comprise a wide scope of products, with a varied level of complexity sourcing, manufacturing, distributing, and selling such products.

Obesity, as the public health issue being served as the rational for the Sweet Tax, is also complex, and multi-faceted, with global experts debating policy and actions to best curb this issue.

“This is the distinction that the FPI wants to stress, on which its opposition to his proposed tax stands. Fundamentally, we refer back to Article VI, Section 28 of the Philippine Constitution, which posits that the rule of taxation shall be uniform and equitable,” he concluded.

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