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Soft drink tax a ‘good health measure’ – IMF official

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Soft drink tax a ‘good health measure’ – IMF official
An International Monetary Fund official likens the proposed measure to the sin tax law, as it also has health benefits


MANILA, Philippines – The proposed measure to tax sweetened beverages like soft drinks could be part of a good comprehensive tax reform package in the country, as it promotes good health while raising revenues,  an International Monetary Fund (IMF) official said.

 IMF Resident Representative to the Philippines Shanaka Peiris said in a news briefing on Wednesday, June 10, that another good measure is the proposal to increase excise tax on petroleum products.

Peiris said there were among the topics discussed at a session of the Asia-Pacific Economic Cooperation (APEC) workshop on fiscal management through transparency and reforms in Bagac, Bataan.

He said that the proposal to tax sweetened beverages such as soft drinks would be a good health measure, just like the sin tax law.

“It would be seen generally as a good government measure for better outcomes and also more revenues,” Peiris said.

Nueva Ecija Representative Estrellita Suansing filed House Bill No. 3365, which seeks to slap a 10% ad valorem tax on carbonated beverages sold in bottles and other tight containers. 

The Department of Health supports the measure.

Toward tax reform

The IMF official also said that the senior finance ministers of APEC discussed the proposal to raise the excise taxe on petroleum products at the Bagac workshop.

The World Bank had  recommended an increased excise tax on petroleum to offset the revenue losses from oil imports due to falling global prices of the commodity.

“This is a very good time to have a rationalization of fuel excise tax. The real burden of those taxes have come down,” Peiris said.

Like sin taxes, fuel taxes will be good for the environment and also good for revenues, Peiris added.

“This could be part of a good comprehensive tax reform,” Peiris said.

In a separate briefing, Richard Parry, head of global relations in the Organisation for Economic Cooperation and Development Center for Tax Policy and Administration, said that the Philippines has taken big steps forward by strengthening the tax administration and the ability to work with taxpayers.

Parry said that an important tax reform is not only to extract money but to have partnerships with taxpayers, large businesses, and institutions.

“The Philippines has done a lot to achieve policies which work in favor of social development by having sound fiscal strategy,” Parry said.

he added it is also important for the Philippines to change its legislation on bank secrecy in order to meet international obligations with regards to the exchange of information.

“It is possible to do it. The political will is needed for the Philippines to meet international standards in that area,” Parry said.

Soft drinks in can image via Shutterstock

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