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Sugar-sweetened beverages tax too high for consumers

BANTAY Konsumer, Kalsada, Kuryente (BK3) expressed support to the Philippine Association of Stores and Carinderia Owners (PASCO) in its campaign against the proposed excise tax on sugar-sweetened beverages (SSBs).

According to BK3, over  300,000 signatures from across the country have already been gathered by PASCO to oppose the tax measure forwarded by House Bill 5636, part of the government’s banner tax reform program dubbed as “TRAIN.”

Based on PASCO’s computations, 40 percent of the daily income of store owners comes from the sales of drinks such as juices and flavored instant coffee in sachets. The proposal could double or even triple the prices of these products, which are consumed by ordinary consumers on a daily basis.

“Unsurprisingly, the poor view the proposed excise tax as “unfair”  and “oppressive,” a stand shared by manufacturers and retailers,” said BK3 convenor Louie Montemar.

The House of Representatives has already approved the “sweet tax,”  which imposes a P10 to P20 tax per liter depending on the source of the sugar content.  HB 5636 levies an excise tax of P10 per liter on drinks with local sugar and P20 on beverages with imported sugar or sweeteners.
“We understand that the government needs to generate revenues to support its programs. However, the proposed excise tax could only worsen the already difficult life of low-income consumers.  There are others development schemes and revenue options that could be considered,” Montemar said.
“One, to fund its ambitious infrastructure projects, it could shift to a Public-Private-Partnership model instead of appropriating funds from the country’s budget. That would free up government resources to help the poor instead of imposing additional burden on them,”  he added.
Montemar said the legislators can revise the excise tax proposal.  The office of Sen. JV Ejercito offers an alternative excise tax scheme for SSB’s that is worth considering.
“Also, instead of imposing an additional burden, government should focus its revenue-generation program on stopping revenue leaks from smuggling, illicit trade, poor tax collection, and corruption. A multi-industry study by the University of Asia and the Pacific (UAP) found out that illicit traders were able to smuggle at least P904.6 billion worth of goods into the country over five years. Revenue from those illegal activities could easily cover whatever revenue is generated from the SSB tax,” Montemar said.
According to Montemar, health concerns related to the consumption of sugary drinks and obesity are relatively weak. But data from the 2017 State of Food Security and Nutrition in the World by the Food and Agriculture Organization showed that undernutrition and not obesity is the more serious problem in the Philippines..
He said the prevalence of undernutrition among Filipino children is 13.8 percent higher than the prevalence of overweight children at five  percent and the prevalence of obesity among adults at 5.2 percent.
“ We support PASCO’s challenge on the proposed SSB excise tax.  We are all consumers. This can burden millions of low income Filipino consumers.  We call on our legislators to prioritize the welfare of consumers,”  Montemar said.