Philippine lawmaker proposes bill that would impose 10% tax on soft drinks and other carbonated beverages sold in bottles and other tight containers, says it would provide government with revenue to help rebuild provinces leveled by recent earthquake

Nevin Barich

MANILA, Philippines , December 26, 2013 (Philippine Daily Inquirer) – Following the higher taxes on "sin" products such as alcohol and cigarettes, could those bottles of cola be next in line?

Higher taxes should be imposed on soft drinks and the like, especially now that the revenue to be collected would go to such an important project as the rehabilitation of calamity-stricken areas, Nueva Ecija Rep. Estrellita Suansing said.

Suansing has filed a bill that would impose a 10 per cent ad valorem tax on soft drinks and carbonated beverages sold in bottles and other tight containers.

She said the benefits of the measure would be two-fold: it would provide the government with a source of revenue for the massive rebuilding of the provinces leveled by recent the recent massive earthquake in the Visayas and the series of destructive typhoons, the latest being Yolanda; and it could help lower the risk of people contracting certain illnesses.

Suansing's bill specifies that the funds to be collected from the imposition of the ad valorem tax would go to the Rehabilitation Fund for calamity victims, and would be used for such programmes as livelihood development, mass housing, road construction, and other infrastructure projects.

"Filipinos are resilient and can rise above all these calamities. However, necessary funds and revenues for the rehabilitation are needed," she said in her explanatory note.

She also touted the health benefits that would come with higher soft drink taxes. An increase in the price of soft drinks and carbonated beverages could help wean consumers from buying these products.

"Aside from the rehabilitation fund, another purpose of the bill is to curb the consumption of soft drinks and carbonated drinks. There have been studies which have shown that consumption of such types of goods increase the risk of developing health problems such as blood sugar disorders, obesity, diabetes and other related diseases like bone fractures, hyperacidity, tooth decay, and heart problems," she said.

According to her, the Philippines would not be the first to impose more taxes for non-alcoholic drinks.

"Other countries like the USA, France, Netherlands and Finland have realised the need to impose taxes on soft drinks and carbonated drinks," she added.

Suansing's bill notes that the soft drink industry is currently subjected to value added tax, income tax, withholding tax, local and real property taxes, and customs duties.

Flavored and colored syrups that are needed to manufacture soft drinks are not subjected to excise tax, and only to the 12 per cent VAT and customs duties if these are imported.

© 2013 dpa

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.