Tax hike on junk food, sweetened beverages to be sought this year —DBM

The Marcos administration will push for the passage of new tax measures this year, particularly additional taxes on sweetened beverages and junk food, Budget Secretary Amenah Pangandaman said Wednesday.

“The revenue measures of the DOF (Department of Finance). Their revenue measures for sweet and salty beverages were planned to kick in by 2025, but what they did is, they will advance it to 2024. So they have now, when the Congress opens, now until the end of the year, they will push for the new revenue measures,” Pangandaman said in a mix of English and Filipino during the Kapihan sa Manila Bay forum.

“Secretary Ben [Diokno] and the DOF team seem very positive [about] the package of said revenue measures,” she said.

In a statement, Diokno provided details of the proposed tax measures.

“Under the proposed tax program, the DOF plans to impose a P10 per 100 grams or P10 per 100 milliliters tax on pre-packaged foods lacking nutritional value, including confectioneries, snacks, desserts, and frozen confectioneries, that exceed the DOH's specified thresholds for fat, salt, and sugar content,” Diokno said.

“Additionally, the DOF intends to increase the sweetened beverage tax rate under the TRAIN Law to P12 per liter, regardless of the type of sweetener used. This tax rate will be indexed annually by 4%, and exemptions will be eliminated to broaden the tax base. These measures aim to strengthen the effectiveness of the sweetened beverage tax by further discouraging the consumption of such beverages,” he added.

In September last year, the Department of Health announced it was proposing additional taxes on junk food and sweetened beverages as it sought to address obesity in the country and boost revenues for the universal healthcare program.

Diokno said the DOF and the DOH "are jointly pursuing a junk food and sweetened beverage tax as a proactive measure to tackle diabetes, obesity, and non-communicable diseases related to poor diet."

The proposal to increase taxes on sweetened beverages will be on top of the existing rates under the Tax Reform for Acceleration and Inclusion (TRAIN) Law, signed by former President Rodrigo Duterte in 2017, which mandates a P6-per-liter excise tax on beverages using caloric and non-caloric sweeteners, and P12 per-liter tax on beverages using high-fructose corn syrup.

Food stamp program

Diokno estimated that the implementation of the junk food and sweetened beverage tax package will generate an additional P76 billion in revenues during the first year.

The tax package is also estimated to result in a 21% reduction in consumption of junk food, he said.

“The incremental revenues from this tax package will fund important socio-economic programs initiated by the Marcos administration, such as the Department of Social Welfare and Development's (DSWD) food stamp program. This program will provide support to one million food-poor households, to alleviate food insecurity and malnutrition,” Diokno said.

The DSWD’s food stamp program targets providing an allowance to at least one million "food poor" families, or those earning less than P8,000 in a month, to purchase a select list of food items from accredited local retailers.

The program is expected to be implemented through the distribution of "electronic benefit transfer (EBT) cards" that will be loaded with food credits amounting to P3,000 per month to purchase a select list of food commodities from DSWD-registered or accredited local retailers.  —VAL/VBL, GMA Integrated News