October 28, 2014
Marissa Luz T. Lopez
Business World
The agency said House Bill (HB) 3365, which seeks to amend the Tax Code by imposing a 10% ad valorem tax on carbonated drinks, on top of the 12% value-added tax on the products, could have consequences for sugarcane farmers.
“The SRA would like to express its concern that the proposed 10% ad valorem tax on soft drinks and carbonated drinks will negatively affect incomes of sugarcane farmers and hamper development plans in the sugar industry,” Jerry B. Dela Cruz, legal counsel of the SRA, said during a committee hearing held yesterday at the House of Representatives.
SRA data show that in 2008, soft drink companies accounted for 23% of total demand for local sugar. Other sweetened drinks, such as juices, coffee and beer, made up 6% of the demand, the sugar agency said.
Mr. Dela Cruz noted that the additional tax could leave farmers with smaller income, as they could suffer the blow of the additional dues.
Bottling companies may instead choose to trim purchase volumes or pass on the taxes to crop raisers by asking for lower prices, he said.
The proposal, sponsored by Rep. Estrellita B. Suansing (Nueva Ecija, 1st district), seeks to levy additional taxes to discourage the consumption of carbonated and sweetened drinks, saying the beverages pose a number of health risks to consumers.
Ms. Suansing said at the sidelines of the hearing that the revenues that would be generated can be allocated to help affected sectors.
Finance Assistant Secretary Soledad Emilia J. Cruz said an estimated P10.77 billion could be generated as a result of the measure based on gross sales of top beverage companies last year. She suggested that the additional taxes should be levied based on volume instead for easier implementation. -- Melissa Luz T. Lopez