THE chairman of the House Committee on Ways and Means on Thursday said the lower chamber has not yet received formal proposals from the Department of Finance or the Department of Health for a tax on salty food as well as increasing excise tax on sweetened beverages.
Albay Rep. Joey Sarte Salceda, the panel chairman, assured the public that his committee will carefully deliberate and study these proposals. While the panel is still studying the best form of a junk food tax, it will prioritize taxes that hit rich people more, he asserted.
“We have not received the proposal yet. But when we do, it will go through the usual tests the committee applies. Who pays for it? What are its macroeconomic impacts? What are the costs and benefits? What are other countries doing? And what do we do if something goes wrong?” Salceda said.
Earlier, Finance Secretary Benjamin Diokno said the DOF and DOH are jointly pursuing a junk food and sweetened beverage tax as a proactive measure to tackle
diabetes, obesity, and non-communicable diseases related to poor diet.
Diokno said they plan to impose tax of P10 per 100 grams or P10 per 100 milliliters on prepackaged foods lacking nutritional value.
He said they also intend to increase the sweetened beverage tax rate under the Tax Reform for Acceleration and Inclusion (TRAIN) law to P12 per liter, regardless of the type of sweetener used.
Meanwhile, Salceda said the Ways and Means committee has also not received “a formal bill from the DOF on sweetened beverages.”
“The decision of course will depend on data. We are just in the median of obesity rates in the region, while having the highest sweetened beverage levies in Asean,” he pointed out.
“As for salt, we do exceed the 2g per day of sodium recommended by the World Health Organization. So, there is cause for government-led efforts to reduce consumption. But, we are also looking at research, and as for salt, it appears that the highest proportion of excess salt in diets come from added salt in food and sauces—so not necessarily ready-to-eat junk food,” he added.
Inflation impact
In that sense, the economist-lawmaker said taxation might not be the best measure.
“We will also look at inflationary impact—because there will definitely be price implications on taxes on food,” Salceda explained.
The House tax panel will also consider, he said, “whether we are in line with the Medium-Term Fiscal Framework of the Marcos administration.”
He added: “If deficit and debt figures are projected to be significantly higher than expected, then we will need fiscal consolidation efforts. That may include new taxes.”
The lawmaker assured the public that they will also look at whether there are widely available and affordable alternatives.
“That’s why we are working with the Department of Social Welfare and Development to create a food stamp program that will make cheap healthy food available to underprivileged families,” he said.
All these, he said, “will drive the decision of the Ways and Means Committee when it comes to food taxes.”
Hit the rich
Salceda also said that the committee will prioritize tax measures “that are clearly progressive and hit the rich first.”
The House tax panel will discuss, he said, “motor vehicle user taxes, especially on heavier cars; and luxury goods taxes first” before it tackles taxes on food.
“Progressivity is definitely the first priority, because that is the only quality of tax measures that the Constitution specifically requires. So, taxes that hit the rich come before taxes that hit the family table,” he said.
Salceda also emphasized that “the Senate would also be well within right to prioritize non-resident digital service provider VAT because the whole region has already done that. We’re catching up.”
Meanwhile, he said, the proposal imposing 12-percent value-added tax (VAT) on goods and service providers using digital transactions “will probably be bigger and more effective at raising revenues than new junk food taxes. And the progressivity and fairness considerations are clearer.”
Salt, sugar tax bills not yet with solons
Source: News Paper Radio
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