Higher Taxes On Sweetened Drinks Could Lead To Labor Retrenchment

The ways and means committee of the Lower House has approved on Tuesday the bill seeking to impose P10 excise tax on sweetened drinks.

HB 3365 bill was authored by Nueva Ecija Representative Estrelita Suansing and was strongly opposed by beverage manufacturers.

A mandatory increase of 4 percent every year will be imposed effective January 1, 2017.

The Department of Finance estimates that the government can gain up to P10 billion every year from higher taxes imposed on sweetened drinks that include soft drinks, fruit drinks, sweetened tea and coffee drinks, energy drinks and all other non-alcoholic beverages that are ready to drink and in powder form.

Exceptions are natural fruit juices, natural vegetable juices, yoghurt, milk products and meal replacement beverage or medical food and weight loss products.

The revenues will be used for health and other government programs such as:

  • 50 percent to the national treasury or general fund
  • 20 percent to the Department of Health
  • 20 percent to the Department of Education
  • 3 percent to the Department of Interior and Local Government
  • 3 percent to the Food and Drug Administration
  • 2 percent to the Bureau of Internal Revenue
  • 2 percent to the Food and Nutrition Research Institute

This is good news for finance and health officials who supported the bill. But beverage companies have strongly opposed this because it will definitely affect their income that could end up to labor retrenchment. They claim that HB3365 is “anti-poor” and “anti business”.

The Beverage Industry Association of the Philippines (BIAP) said that this bill would make those products more expensive for the ordinary consumers.

BIAP groups are Asia Brewery, Coca Cola Co., Mondelez Philippines, Pepsi Cola Products Philippines, San Miguel Corporation and Zest-O.

SourcesBusiness InquirerNews Info InquirerRappler