Philippines: Dominguez willing to compromise on sugar tax – 14 Aug 2017

  • The Department of Finance (DOF) is open to dropping the proposed excise tax on sugar-sweetened beverages as long as legislators pass the tax reform bill in its original form.
  • In an interview, Finance Secretary Carlos Dominguez said the DOF has offered to scrap the proposed sugar tax in exchange for the approval of Senate Bill 1408 in its original form, and not just the proposal on the fuel excise tax as reported by Senate ways and means committee chairman Juan Edgardo Angara earlier.
  • “What I told (Senator) Angara was I am willing to drop the sugar tax, but pass the original DOF bill,” Dominguez said. The finance chief explained he is amenable to the exclusion of the sugar tax as it was only included by the House of Representatives to cushion the decrease in expected revenue after it watered down other provisions of the bill.
  • Dominguez said there is no need for now to pass the proposed excise tax on sugar sweetened beverages. But he said it may still be covered in the fifth package of the DOF’s Comprehensive Tax Reform Program (CTRP), where it was originally included.
  • Package five of the CTRP focuses on health, environment and luxury taxation, including the increase in alcohol and tobacco excise tax (after the mandated review on the Sin Tax Reform Law), increase in coal excise tax, and introduction of an environment tax on carbon emissions, among others.
  • According to estimates from the DOF, Senate Bill 1408, which contains the first CTRP package, is expected to yield the government an additional PHP103.3bn in the first year of its implementation, without the measure on sugary beverages.
  • On the other hand, House Bill 5636 is projected to generate about PHP68bn in 2018 without the proposed excise tax on sugar sweetened beverages and other complementary measures.

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