A 10% excise tax on soft drinks is being proposed by several Philippine lawmakers.
According to their petition, this tax will help curb the growing cases of diabetes and obesity in the country.
Representative Estrellita B. Suansing from Nueva Ecija has already filed for this bill. The bill, which will impose a 10% ad valorem tax on soft drinks that is currently subject to 12% value added tax (VAT), is predicted to generate approximately P10.5 million in revenues.
Another purpose for this tax is to help victims in areas that have been hit by calamities. At present, under the existence of House Bill 3365, the revenues collected from the soft drink tax will be used for the government’s rehabilitation fund. This fund is going to be used to fund housing, road construction, and other infrastructure projects in areas that have been hit by various calamities.
As mentioned, the other purpose of the bill is to encourage a healthy lifestyle among Filipinos who are known to enjoy a high consumption of soft drinks. It is said that the high consumption of soft drinks and carbonated drinks is a possible factor in the increasing numbers of Filipinos suffering from diabetes and obesity. It also causes tooth decay.
The bill is being met by various reactions from different sectors. Some fear that this will lead to a banning of the soft drinks altogether.
“Hindi naman natin ipinapa-ban ang soft drinks. We are just curbing the consumption, we are reducing the consumption because of the effect to the health,” Suansing said during the committee hearing. She also added that she is open to allocating a portion of the revenues to the government’s health programs.
(“We are not banning soft drinks. We are just curbing the consumption, we are reducing the consumption because of the effect to the health”)
However, the Department of Health (DOH) has responded to this claim stating that there is no existing study yet that shows a direct link between the consumption of soft drinks and the ailments that have been cited.
In behalf of the Beverage Industry Association of the Philippines, Atty. Adel Tamano expressed disagreement with the tax.
“Taxation will not solve the problem of obesity. People consume many kinds of food and beverages so no one single food or beverage can be said responsible for making people obese,” he said.
Tamano also pointed out that the beverage industry purchases about 60%-70% of the local sugar output of the country. The tax will have its effects on the economy. Instead of imposing the tax, he recommends that beverage companies be pushed to observe a “front of pack” labeling approach which will help consumers make informed choices relating to their diet. This labeling approach refers to having a breakdown of all ingredients and nutritional values clearly on the product.
In the United States, about two months ago, a similar bill proposing warning labels on sugared drinks was already denied. If approved, the bill would require all sugared drinks which includes sodas and energy drinks to have a warning on their products stating that added sugar contributes to “obesity, diabetes, and tooth decay.” It was a 7-8 vote, as lawmakers raise their doubts that the bill could change consumer behavior.