The (Un-) Sweet Story
Mary Jane C. Gutierrez, MD
Filipino affection for sweets is very evident in our daily living, from the “kakanin” our grandparents adore as “merienda”, the simple spaghetti sauce “Filipino style” cooked at home to the famous “halo-halo” for dessert. This love for the sweet stuff started with the introduction of sugar predating Spanish colonization when the first sugar cane cuttings where planted in Mindanao by Arab traders. It became a major industry in the 19th century in the hands of an entrepreneurial British vice consul in Iloilo, Nicholas Loney. From this era until mid-1970’s, we became a major exporter of sugar to the United States of America and Australia.
With the change in lifestyle and the gastronomic culture, chronic noncommunicable diseases such as heart disease, cancer and diabetes pose a greater burden worldwide than do infectious diseases contributing to 35 million deaths annually according to the United Nations. Now, added sugars and their main proxy, sugarsweetened beverages (SSBs) commonly added to cereals, ice cream, juices and sodas, independent of tobacco and alcohol use, are increasingly being regarded as a serious threat to public health. In fact, some have labelled sugars as the “new tobacco”, with calls to regulate sugars similar to tobacco and alcohol (2, 3, 4, 5).
This leads us to discuss an interesting matter relating to the proposed tax on sugar-sweetened beverages. SSB tax or “soda tax” is not a new concept. To curtail the growing health concerns, as early as 2011, Denmark, Finland and Hungary followed by France, Mexico and United Kingdom began taxing sodas. In Asia, our country is among the first to tax SSBs. This is known as House Bill (HB) 292 entitled: “An Act Imposing Excise Tax on Sugar Sweetened Beverages by inserting a new Section 150-A in the National Internal Revenue Code of 1997, as amended“to promote public health and wellness” sponsored by Representatives Horacio Suansing Jr. of the 2nd district of Sultan Kudarat and Estrellita Suansing of the 1st district of Nueva Ecija (2, 3, 4, 5).
HB 292 introduces the imposition of excise tax on sugar- sweetened beverages (non-alcoholic beverages that contain caloric sweeteners or added sugar or artificial/non-caloric sweeteners such as soft drinks, fruit drinks, sports drinks, sweetened tea and coffee drinks) and all other non-alcoholic beverages containing caloric sweeteners or added sugar or artificial/noncaloric sweetener at a rate of P10 per liter of volume capacity and revenues collected will then be allocated for the following proposed purposes:
(a) 50 percent to the General Fund;
(b) 20 percent to the Department of Health for provision of medicines and medical assistance for diabetes and other noncommunicable diseases through provincial and district hospitals as well as for health and wellness promotion;
(c) 20 percent to the Department of Education to provide public schools and sports facilities access to potable water and health awareness programs;
(d) three percent to the Department of Interior and Local Government under the Sagana at Ligtas Na Tubig Sa Lahat (SALINTUBIG) and Grassroots Participatory Planning and Budgeting (GPPB) Priority LGUs;
(e) three percent to the Food and Drug Administration to support the implementation of its mandate to ensure the safety, efficacy or quality of health products;
(f) two percent to the Food and Nutrition Research Institute, and
(g) two percent shall accrue to the Bureau of Internal Revenue for tax administration.
Subsequently, HB 292 was adopted and included as Section 25 of HB 5636, or otherwise known as “Tax Reform for Acceleration and Inclusion (TRAIN)” which was approved by the House of Representatives on May 31, 2017. HB 5636 also imposed the same excise tax rate of P10 on every liter of sugar-sweetened beverages containing locally produced sugar, while an excise tax at a rate of P20 per liter is imposed for imported sugar.
The following items were excluded from the proposed imposition of the excise tax on SSB as provided by Section 25 of HB 5636 as follows:
1. Plain milk and milk drink products without added sugar;
2. All milk products, infant formula and milk alternatives, such as soy milk or almond milk, including flavored milk, such as chocolate milk;
3. 100 percent natural fruit juices;
4. 100 percent Natural Vegetable Juices;
5. meal replacement beverages and medically indicated beverages;
6. Ground coffee; and
7. Unsweetened tea
The proposed imposition of excise tax on SSBs was thereafter incorporated in Senate Bill (SB) 1592 which was submitted by the Committee on Sept. 20, 2017. To date, SB 1592 is pending before the Senate Ways and Means Committee. As such, a new version of tax on SSBs was adopted by the Senate version of this SSB bill. SB 1592 imposed the following rate of taxes:
1. a tax of P5 per liter of volume capacity shall be imposed on sweetened beverages using purely caloric sweeteners;
2. a tax of P10 per liter of volume capacity shall be imposed on sweetened beverages using purely high fructose corn syrup or in combination with any caloric or non-caloric sweetener; and
3. a tax of P3 per liter of volume capacity shall be imposed on sweetened beverages using purely non-caloric sweeteners or a mix of caloric and non-caloric sweeteners.
Further, the following are the exclusions:
1. sweetened beverages using purely coconut sap sugar; and
2. sweetened beverages using purely steviol glycosides (4,5).
The provisions of the HB and the Senate bill are yet to be made while discussions are still ongoing as to whether or not tax on the sugar-sweetened beverages will be taken into consideration and will eventually form part of the new Tax Code. On a positive note, if this bill is passed, our government will be able to raise revenues and at the same time fight obesity and diabetes.
References: 1. History of Sugar Industry in the Philippines. (n.d.) In Wikipedia. Retrieved June 08, 2018. 2. Sievenpiper, JL and de Souza RJ. The American Journal of Clinical Nutrition. Aug. 1, 2013.Volume 98(2):261–263. 3. Sugar-sweetened Beverage. (n.d.) In Wikipedia. Retrieved June 08, 2018. 4. 17th Congress, 1st Regular Session, House Bill 292. 5. Casiguin, R. Bitter culmination:Tax on sugar-sweetened beverages. Philippine Star. Oct. 6, 2017.
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