The Department of Finance (DOF) is willing to drop the proposal to tax so-called sugar-sweetened beverages (SSBs) but only if the Senate will adopt the first package of the Comprehensive Tax Reform Program (CTRP) in its original form.
Finance Secretary Carlos G. Dominguez III reiterated this point last Friday to negate a statement attributed to Sen. Juan Edgardo M. Angara on the DOF ostensibly being open to drop the tax on SSBs.
He clarified that the government will give up the tax on SSBs only if the committee passes the original CTRP proposal as encapsulated in Senate Bill (SB) 1408 authored by Sen. Aquilino L. Pimentel III.
“What I told Angara was, I am willing to drop the sugar tax but pass the original DOF bill. You don’t have to pass it this time. You don’t have to pass it at all but pass the original bill filed by Senator Pimentel. You pass that, [we] take out the sugar tax,” Dominguez told financial reporters.
Just last week Angara claimed Dominguez was willing to compromise with Congress on the tax bills, specifically in dropping the tax on SSBs in exchange for the full package of the excise taxes on fuel alone. He was referring to the P6 fuel-tax hike that the House of Representatives passed in increments of P3 for the first year of implementation, P2 in the second year and P1 for the third year.
Angara said the meeting of the Senators in Malacañang was merely a discussion and not a bargaining opportunity and that he expected another meeting with the country’s economic managers on the pending tax bills.
According to Dominguez, around P167 billion was expected under the original DOF-supported SB 1408 in its first year of implementation.
“That was the only reason why that sugar tax came in. They [the Senate] took out a lot in the first bill,” Dominguez stressed.
Finance Assistant Secretary Ma. Teresa S. Habitan said the sugar tax was not in the first package of the CTRP but was included in the fifth package that focuses on health.
“The sugar tax was not originally in package one. It was in package five together with the other health taxes. It’s really up to the Senate,” Habitan told financial reporters.
Under House Bill 5636, SSBs will be levied a P10 per liter excise tax to discourage consumption of unhealthy drinks. It is deemed more as a health measure rather than a revenue measure.
The tax on SSBs was seen generating an additional P47 billion on its first year of its implementation and earmarked for the country’s health programs.