Ouch! PH gov't to lose P2.5B in sweetened beverage tax if...

The national government might see losses of up to P2.5 billion in sweetened beverage taxes if industrial users and producers don’t have the sugar they need to continue their operations, Albay 2nd district Rep. Joey Salceda said.

Albay 2nd district Rep. Joey Salceda

“Jobs are on the line. Taxes are on the line. Growth is on the line, if industrial users are unable to get their sugar. Consumers can shift from refined to raw sugar, or even shift preferences altogether to other alternatives. But industrial users always need high-grade refined sugar,” Salceda said in a statement Tuesday, Oct. 25.

“Right now, beverage makers only have around four days’ worth of inventory at a time. They usually operate at 21 days’ worth of inventory. If they are unable to procure sugar from the 150,000 MT (metric tons) sugar import order of the SRA, we’re going to see more work stoppages. Beverage plants can only produce their zero-sugar or ‘diet’ varieties. That doesn’t account for much of the demand,” the solon noted.

Salceda–who chairs the House Committee on Ways and Means–said that if the sugar importation crisis had not taken place, around P37 billion in sweetened beverage taxes could have been generated.

He said loosened pandemic restrictions could have allowed restaurants to reopen, driving a greater demand for sweetened beverages.

The Bicol lawmaker suggested that industrial users and producers of sweetened beverages be allowed to import at least 200,000 MT of refined sugar to resume operations.

“They have to make do with volumes like 9,000 MT from individual traders. That may sound like a lot. But that’s one or two days of peak production at these beverage makers,” he explained.

Salceda also proposed that import allocations be pro-rated based on excise tax payments to serve as “empirical bases for sugar allocation".

“It’s also an incentive for bottler companies to pay their taxes right. If you don’t pay your taxes right, you don’t get enough sugar,” he pointed out.

“Reliable and cheap sugar supply is the future of our food and agriculture processing sector. If you don’t have cheap sugar, you won’t have a big food processing sector. We’ll be forced to import products with sugar anyway, like we do 3-in-1 coffee. And they won’t produce jobs here. We won’t produce value-added for farmers. Being import-averse is the worst option in this case,” Salceda concluded.