Tax attack? Philippines considers higher sugar levy and new ‘junk food’ tax to offset COVID-19 impacts
By Pearly Neo
- Last updated on
In June, the Philippines was considering implementing higher sugar taxes as well as new taxes on ‘junk food’ high in sodium and trans fat to offset the costs incurred by the COVID-19 pandemic outbreak.
This additional taxation was proposed under the Philippine Program for Recovery with Equity and Solidarity (PH-PROGRESO) draft proposal submitted by the Philippines Department of Finance (DOF) as part of a ‘Phased and adaptive recovery approach’.
According to the proposal slides, which FoodNavigator-Asia has viewed, these fall under what DOF deems to be ‘Targeted tax incentives’, and are expected to be part of the country’s ‘Recovery Stage’ from COVID-19 which is expected to take place until December 2020 before moving to a ‘Resiliency Stage’ in 2021.
“[There are] three possible growth cases [from this point], but it is hard to put an estimate right now,” said DOF at the time.
“The first is a V-shape: quick recovery starting July 2020; the second is a W-shape: quick recovery starting July 2020 followed by a second wave of infection, and the third is a Long U-shape (valley): long recovery spanning several quarters, with likely recovery in 2022 when vaccine is developed.
“We can proactively use policies to achieve a V-shaped recovery.”
One of the taxes that the DOF hoped to adjust to achieve this recovery was that on sugar-sweetened beverages, which currently stands at PHP4.50 (US$0.09) for beverages sweetened with a caloric or non-caloric sweetener (non-high-fructose corn syrup) and PHP 9.00 (US$0.18) per litre for those with high-fructose corn syrup.