The Department of Finance (DOF) said that it would not include high-salt products typically consumed by poor Filipino households in its proposal to impose taxes on salty foods.
Finance Secretary Benjamin E. Diokno said popular food items like instant noodles will not be subject to the proposed tax to provide some relief to low-income families who rely on these products as staple food items.
“It doesn't cover everything,” Diokno clarified. “If you’re thinking of instant noodles, that's really for the poor.”
Diokno’s clarification follows criticisms that the DOF's new tax proposal on salty foods could cause challenges for low-income families who rely on affordable yet unhealthy staple products, such as instant noodles.
The finance chief further added that the salty-tax proposal would likewise exempt other high-salt products sold on the street, like pork cracklings (chicharron)
By excluding these products from new taxes, Diokno said the government would mitigate the potential financial strain on low-income families and ensure that they can continue to access the food they need.
“We’re consulting with the National Nutrition Council and DOH [Department of Health]. We will continue to consult, this is not yet been firmed up.”
Diokno also said that the DOF’s salty tax has not yet been discussed with President Marcos.
Under the joint DOF and DOH proposal, the government seeks to impose a P10 per 100 grams or P10 per 100 milliliters tax on pre-packaged foods that are deemed to lack nutritional value.
These include confectioneries, snacks, desserts, and frozen confectioneries that exceed the DOH’s specified thresholds for fat, salt, and sugar content.
In an effort to further strengthen the effectiveness of the existing sweetened beverage tax, the DOF also proposed to increase the tax rate to P12 per liter, regardless of the type of sweetener used.
Currently, sweetened beverages with caloric and non-caloric sweeteners and with an added sugar content of more than six grams per 100 milliliters will be subject to an excise tax of P6 per liter.
However, beverages containing purely caloric sweeteners, such as 100 percent natural fruit juices, will be exempt from the excise tax. Likewise, milk and milk products, including sweetened milk, are exempt from the levy.
Diokno said the DOF is proposing to remove these exemptions to broaden the tax base.
“As a sweetener to our proposal, we will tax you but we will allow you to import sugar,” the finance chief said.
Aside from a higher sugar tax, the DOF also wants an annual indexation to inflation of four percent.
"These measures aim to strengthen the effectiveness of the sweetened beverage tax by further discouraging the consumption of such beverages,” Diokno said.
The proposed implementation of the junk food and sweetened beverage tax package is expected by the DOF to yield an additional P76 billion in revenues during the first year.
Moreover, the DOF said this levy would result in a 21 percent reduction in the consumption of junk food, a major contributor to diet-related diseases.
“The incremental revenues from this tax package will fund important socio-economic programs initiated by the Marcos administration, such as the Department of Social Welfare and Development's food stamp program,” Diokno said.
“This program will provide support to one million food-poor households, to alleviate food insecurity and malnutrition,” he added.