Senator urges Philippines to follow different route to sugar tax

By RJ Whitehead

- Last updated on GMT

Senator urges Philippines to follow different route to sugar tax
A leading lawmaker has joined the drinks industry’s calls for the government to implement a sugar tax based on content, instead of the current proposal which would be governed by sugar volume.

Lending his voice to the issue, Senator Win Gatchalian said imposing a levy that is directly related to the amount of added sugar to a beverage would generate more revenue than an arbitrary tax of up to PHP10 (US$0.19) per bottle.

He estimated that the system could bring the treasury PHP47bn by imposing a tax of 10 centavos per gram of sugar contained in a beverage. 

The scheme would also encourage drinks manufacturers to use less sugar in their products, making the tax more effective in terms of public health outcomes, he added.

"We can actually hit two birds with one stone: achieve the health purpose of this bill and, at the same time, achieve the revenue purpose of this bill​," said Gatchalian during the Senate plenary debates on the measure.

While his proposal has proved to be popular, and follows pleas by the beverage industry for the government to follow similar lines, it comes with some difficulties.

By Food and Drug Administration estimates, I could take up to five years to develop the technology and hire the staff needed for the full implementation of a content-based scheme.

To solve this, Gatchalian has proposed allocating the PHP1.3bn the FDA estimates it needs to address its lack of capacity to monitor the sugar content of beverages.

"PHP1.3bn is actually a small investment if we project to earn so much from the sugar tax. We can actually allocate this immediately for them in the first few months, buy the necessary equipment and probably implement the content-based scheme as early as the two years prescribed by the law​," Gatchalian said.

Meanwhile, the Philippines Department of Agriculture has said it will retain a cap on the entry of high fructose corn syrup into the country.

Sugar companies had fretted that an order to limit imports and impose stiff tariffs on the commodity would be revoked. They also worried that the appointment of a new head of the Sugar Regulatory Authority, Herminigildo Serafica, would further pave the way for an end to restrictions.

A number of farmers, millers and workers have recently complained about the unregulated importation of HFCS, which they believe has affected the production and pricing of the local sugar.

Agriculture secretary Emmanuel Piñol said the cap would not be revoked anytime soon, and that the government has been supportive of the native sugar industry.

Other than the HFCS, which passes through very stringent measures, there has been no importation of sugar since President Duterte stepped into office. The strict requirements will be maintained to protect the welfare of all parties concerned​,“ Piñol said.

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