The Philippine House of Representatives Ways and Means Committee has just approved on first reading a bill that seeks to revise the excise tax on sweetened beverages including carbonated drinks last Tuesday, Nov 10.
The House Bill 3365, also called "soft drinks tax," authored by Representative Estrellita Suansing aims to add $0.22 additional tax for every liter on several sugar-sweetened drinks that are non-alcoholic but contain added sugar or artificial sweeteners. These include sodas, sweetened coffee or tea, energy drinks, and ready-to-drink beverages that are available in powder form. The bill doesn't cover milk products, yogurt-based beverages, meal replacement drinks, and juices made from all-natural fruits and vegetables.
Aside from the per-liter tax increase, the bill also wants to increase tax rate by 4% each year beginning in 2017.
The bill also makes the manufacturers and distributors accountable such as compelling them to submit a sworn statement indicating their sales volume over a certain period. Failure to comply with the provisions may endanger their business with cancellation of permits to operate and sell the related beverages.
Although this is more of a tax measure wherein the government is expected to generate more than $635 million of annual revenue should the bill becomes law, it may also deter the consumption of too much calories and sugar as well as reduce the risk of obesity.
According to a 2014 obesity report from the Food and Agriculture Organization (FAO) of the United Nations, Philippines is one of the two countries (the other is India) to have the highest obesity rate in developing nations. Meanwhile, a 2011 Food and Nutrition Research Institute survey says that at least 20% of Filipino adults are overweight while more than 5% are already considered obese. Obesity is being linked to long-term chronic diseases such as heart disorders, colon cancer, and type 2 diabetes.
While the bill has gathered support form medical organizations, the Beverage Industry Association of the Philippines (BIAP) has expressed its disapproval, calling it an economic burden as businesses may be forced to lay off employees as sales and profit may drop.