Teves won't back bid to tax softdrinks

Proposals to impose taxes on softdrinks are not among the government’s priority measures for 2009 even as lawmakers have filed various bills in Congress seeking to impose taxes on the different carbonated drinks sold in the country.

Finance Secretary Margarito Teves said that the government is not inclined to support new taxes next year. Instead, he said, the government would push for the measure seeking to rationalize fiscal incentives and the one seeking to simplify the country’s net income taxation scheme.

”We already said we are not inclined to propose new taxes. Where it is in support of whatever revenue that comes up but this one has to be initiated by Congress,” Teves said, referring to proposals to tax softdrinks.

Quezon Rep. Danilo Suarez has filed House Bill 595 which proposes to tax syrup used on soft drinks. The bill proposes a 10 percent value-added tax on flavored or colored syrups used for soft drinks.

However, instead of a tax on syrup used on softdrinks, the Department of Finance (DOF) favors imposing an excise tax on soft drinks and other carbonated drinks instead of imposing the tax on sugar or syrup used on these drinks.

The DOF nonetheless, stressed that putting in place new taxes is not a priority of the government.

“If you have to tax, it’s better if you tax directly the output and not the input. If the objective is to regulate and discourage consumption of soft drinks, then the Finance department might consider proposals imposing excise tax on soft drinks itself,” the DOF said in its position paper.

Under this proposal, a 10 percent ad valorem tax on flavored or colored syrups exclusively used in manufacturing soft drinks would be imposed on the manufacturer.

Beverage giants such as the Asia Brewery Inc., Coca-Cola Bottlers Philippines, Inc. and the San Miguel Brewing Group are also against proposals seeking to impose an excise tax on sugar or syrup used on carbonated drinks.