AN excise tax rate of 10 to 20 percent may be considered to be imposed on junk foods to discourage consumption of these products, a study released by a government think tank said.
The report published by the National Tax Research Center (NTRC) also said this will allow the government to generate revenue of as much as P73 billion per year, on the average, over a five-year period.
In a study titled “Feasibility of imposing a junk food tax in the Philippines,” the NTRC said the excise tax can be slapped to discourage the habit of consuming food that can be detrimental to the body, especially for the young and the poor.
The study also shows that under the possible excise tax rates of 10 percent, 15 percent and 20 percent, the average annual excise tax collection for the period 2020 to 2024 would amount to P36.5 billion, P54.7 billion and P73 billion, respectively.
“Results will show that the higher the tax rate the higher the revenue that will be derived. Similarly, the higher the tax rate to be imposed, the higher the increase in product price will be,” according to the report dated September to October 2019, but published in the website last April.
“Viewed from the perception of discouraging the bad habit of consuming junk foods, a higher rate of excise tax is proposed as this will result in higher prices and will limit consumers’ consumption, thereof,” it added.
The report pointed out that excessive eating of junk food is one of the bad dietary habits developed by Filipinos which, along with lack of physical activity, caused obesity among individuals.
“Aside from taxing unhealthy foods, subsidizing healthy foods, restricting food advertising, and possibly eliminating advertising of junk food, candies, softdrinks, fast foods, and sugared cereal for children, as well as providing more bicycle paths and recreational center to encourage physical activity, can be considered,” the report said.
