Sugar sweetened beverage taxes too much for ordinary consumers
November 20, 2017CitizenWatch Philippines stands firm in defense of the rights of Filipino consumers.
As an advocacy group that aims to empower ordinary consumers on their primary right to avail of basic commodities at affordable prices, we strongly urge the members of the Congress to minimize the impact of the sugar sweetened beverage taxes as it will significantly AFFECT the lives of millions of low-income Filipino consumers.
Low-income earners consume these products—instant powdered juice drinks, energy drinks and carbonated SOFTDRINKS—on a daily basis, and higher prices could take a toll on their everyday expenses as once inexpensive products become suddenly unaffordable.
Instead of using the House-approved excise tax rate of P10 per liter for drinks containing purely locally produced sugar and P20 on beverages with imported sugar or sweeteners, CitizenWatch Philippines supports the amendments proposed by Senator JV Ejercito to lower the sugar sweetened beverage taxes.
From our monitoring and according to amendments submitted to the Senate Ways and Means Committee, Sen Ejercito’s proposals include: (a) tax of three centavos (Php 0.03) per gram of sugar on sweetened beverages using purely caloric sweeteners except for those using purely coconut sap sugar; (b) tax of five centavos (Php 0.05) per gram of sugar on sweetened beverages using purely high fructose corn syrup or in combination with any caloric or non-caloric sweetener; and (c) tax of one centavo (Php 0.01) per gram of sugar on sweetened beverages using purely non-caloric sweeteners or a mix of caloric and non-caloric sweeteners except for those using purely steviol glycosides.
Lowering the excise tax rates for sugar sweetened beverages is the best compromise for consumers, stakeholders, and the government. While lower taxes will provide higher benefits for the Filipino consumers, the Tax Reform for Acceleration and Inclusion (TRAIN) will still be able to generate revenues to support its programs.
While our organization recognizes the avowed rationale of this tax measure, the social-economic equity implications has far-reaching consequences than its supposed health concern.
First, data from the 2017 State of Food Security and Nutrition in the World by the Food and Agriculture Organization of the United Nations show that the health problem that needs immediate attention and resolution is in fact undernutrition, not obesity. From a policy research perspective, it remains to be seen whether such taxes can indeed affect health outcomes. Long-term studies are required to ascertain life-long health impacts and the sensitivity of consumption to incremental increases in tax rates.
Lastly, in the bigger scheme of things, the threat of increase will ultimately affect the vitality of our manufacturing and local sugar industries. In view of higher taxes, a stagnant supply of sugar-related products and byproducts is seen as a consequence. Accordingly, the demand for raw sugar, as cultivated by our sugar farmers and as sourced from the local industry players, will decrease as the food and beverage manufacturing sectors slow down its production.
Although a narrow focus on quick tax solutions may tally into political points, this runs into the risk of leapfrogging basic public health and development goals for our country. As champions of consumer rights, CitizenWatch Philippines strongly urges our lawmakers to minimize the sugar sweetened beverage taxes to ensure that higher benefits are accorded to our Filipino consumers. This calls for a reassessment of the proposed legislative measure to focus on the real and pressing issues rather than choosing the easy way out of passing the tax burden to low-income earners. Further, it is important to note that there are other solutions which the government can pursue, such as increasing tax efficiency and collection, to increase its revenues instead of passing on the shoulders of the already burdened Filipino consumers.
For the welfare of Filipino consumers.