July 19, 2018, 3:58 am
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DOF willing to drop sugar tax if…

Finance secretary Carlos Dominguez III clarified that he is willing to drop the proposed tax on sugar-sweetened beverages, if the tax reform bill supported by the Department of Finance (DOF) is passed in its entirety.

This is in contrast to earlier reports quoting Sen. Juan Edgardo Angara, chair of the Senate ways and means committee, who said Dominguez was amenable to dropping excise taxes on sugar-sweetened beverages in exchange only for the full passage of increases in oil excise tax.

“What I told (Senator) Angara was I am willing to drop the sugar tax but pass the original DOF bill,” Dominguez said.

“He is quoting me as saying go to the original (proposal on the increase in the excise tax on) fuel. No, it’s the whole package filed by Senator Koko Pimentel,” he added.

The DOF submitted the first package of the Comprehensive Tax Reform Program to the Congress last September 26 and was filed as House Bill (HB) 4774 in January 2017.

The House ways and means committee approved last May 8 a substitute measure HB 5636 that consolidated HB 4774 with 54 other tax-related bills. It has moderate changes from the original measure (HB 4774) endorsed last year by the DOF to the Congress. 

HB 5636 aims to slash personal income tax rates by, among others, making the first P250,000 received by compensation earners as tax-exempt. The bill also included complementary revenue-enhancing measures such as adjusting excise taxes on fuel and automobiles, broadening the value-added tax base, and implementing a tax on sugar-sweetened beverages.

Senate President Aquilino Pimentel III filed last March the Senate version of the measure, Senate Bill1408, which is said to be closest to the DOF proposal.

“(Quite frankly), the only reason why that (proposed tax on sugar-sweetened beverages) came in, they took out a lot in the first bill,” Dominguez said.

“You don’t have to pass it (excise tax on sugar-sweetened beverages) this time, you don’t have to pass it at all, but pass the original bill that was filed by Senator Pimentel. You pass that, take out the sugar tax,” he added.

Among others, HB 5636 seeks to impose a P10 excise tax per liter of volume capacity on sugar-sweetened beverages containing purely locally produced sugar and P20 for other beverages that will take effect beginning Jan. 1, 2018.

These beverages include:sweetened juice drinks; sweetened tea and coffee; and other beverages such as all carbonated beverages with added sugar, including those with caloric and non-caloric sweeteners; flavored water; energy drinks;sports drinks; powdered drinks not classified as milk, juice, tea and coffee; cereal and grain beverages; and other non-alcoholic beverages that contain added sugar. 

On the other hand, excluded are plain milk and milk drink products without added sugar; all milk products; 100 percent fruit juices; 100 percent natural vegetable juices; meal replacement and medically indicated beverages; ground coffee; and unsweetened tea.
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