Gov't mulls higher taxes on soft drinks

Posted at 01/24/13 3:06 PM

MANILA, Philippines - After raising taxes on cigarettes and liquor, the government is now mulling imposing higher taxes on soft drinks.

Finance Assistant Secretary Ma. Teresa S. Habitan said higher taxes on soft drinks may provide additional revenue for the government, but was quick to clarify such a measure is not included in the Aquino administration's priority legislative agenda.

"There has to be some theoretical underpinning to why you’re taxing a commodity. In the past, they wanted a further study on the health aspects of soft drinks," she said.

The Department of Finance was asked by Congress in 2008 to study the possible impact of a bill seeking to impose a 10% ad valorem tax on flavored or colored syrups that were exclusively used in the manufacturing soft drinks.

Asked if a proposed tax on soft drinks would be included in the legislative agenda, Habitan said they are now waiting for Congress to propose such a measure.

Economist Benjamin Diokono last week said the government should consider imposing higher taxes on soft drinks.

Initial estimates by the DOF showed potential tax collection from two of the biggest beverage companies may reach P5 billion. But the DOF was cool to the idea of taxing soft drinks manufacturers, saying it might be difficult to administer.