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Philippines: Excise tax on sugar-sweetened drinks to hike prices up to 140%
MANILA, Philippines – Carbonated drinks, energy drinks, sweetened tea and coffee, fruit drinks and other similar products are expected to see minimal to substantial price increases should the proposed excise tax adjustments on sugar-sweetened beverages be pushed by the Congress, data from the Department of Finance (DOF) showed.
According to a price survey conducted by the DOF, the implementation of House Bill 5636 or the Tax Reform for Acceleration and Inclusion (TRAIN) Act could push the prices of sugar-sweetened beverages by two percent to as much as 140 percent.
Under Section 150-A of the bill, sugar sweetened beverages will be levied an excise tax of P10 per liter of volume capacity.
This is with the exemption of 100 percent natural fruit juices, 100 percent natural vegetable juices, yogurt and fruit flavored yogurt beverages, meal replacement beverages, weight loss product and all milk products.
Based on the survey, DOF estimates that the cost of soft drinks and carbonated drinks will climb by as much as 36 percent from the current prices.
The retail price of one-liter bottle of Coca Cola, for one, is projected to increase to P42.2 per bottle from the current P31 per liter.
Meanwhile, the price of a 350-milliliter bottle of Cobra, an energy drink, could rise by 18 percent to P25.1 per bottle from P21.2.
Sweetened milk, tea and coffee beverages will also be affected by the proposed excise tax with price increases. A pack of Yakult, for example, could cost P40.9 with excise tax from the current price of P40.
Fruit drinks, meanwhile, will bear the brunt of the proposed excise taxes. The retail price of liquid fruit beverages, such as a 250-ml punch of Zest-O mango drink, could rise by as much as 48-percent.
Cost of powder fruit drinks, including Nestea, Tang, and Eight O-clock, meanwhile, is projected to increase as much as 140 percent. From P8 per sachet, Nestea’s price could jump to P19.2, according to DOF estimates.
HB 5636 was crafted by the House Committee on Ways and Means after consolidating all tax-related bills in the Lower House.
Earlier, Finance Undersecretary Karl Kendrick Chua estimated that the imposition of P10 per liter excise tax would generate P47 billion in government revenues in the first year of its implementation.
But Chua clarified that sugar tax would serve more as a health measure to dissuade consumers from buying sugar-sweetened products.
“It is more of a health measure. I understand (Nueva Ecija Rep. Estrellita Suansing) explained it has to be high enough to dissuade consumption,” he had said.
Source: http://www.philstar.com/business/2017/05/25/1703222/excise-tax-sugar-sweetened-drinks-hike-prices-140