May 3, 2022
The Philippine Star | https://bit.ly/3vChrwB
MANILA, Philippines — The government raises at least $2 million (P105 million) every day from taxes on sugar sweetened beverages (SSBs) as the country relies on fiscal reforms to generate revenues to finance its pandemic recovery, according to Finance Secretary Carlos Dominguez.
Dominguez said the Philippines also saw its revenues improve when it slapped additional taxes on cigarettes as part of the government’s set of measures to reform the fiscal structure.
The government relies heavily on revenue collections from taxes on sin products and SSBs to bankroll its social amelioration programs.
The Tax Reform for Acceleration and Inclusion (TRAIN) Law, signed into law in 2017, exempted workers earning P250,000 and below every year from paying personal income taxes.
However, the TRAIN Law also enforced excise taxes on multiple goods like fuel and SSBs.
In particular, the measure charges a P6 per liter tax on drinks containing caloric and noncaloric sweeteners, and a P12 per liter tax on beverages with high-fructose corn syrup.
In 2019, President Duterte also signed the Tobacco Tax Law that slapped an excise tax of P45 a pack for locally manufactured cigarettes, going up by P5 every year until it reaches P60 in 2023.
From 2024 onward, the law mandated that the tax rate increase by five percent yearly or based on the recommendation of the finance chief.
On the sidelines of the World Bank-International Monetary Fund Spring Meetings, Dominguez also met with Japanese Finance Minister Shunichi Suzuki to propose a demographic tie-up for pandemic recovery.
He said such a partnership could be maximized now that the economy has relaxed its foreign ownership restrictions.
Under this demographic partnership, Dominguez said Japan would provide research, technology, and resources for the Philippines.