THE Sugar Regulatory Administration (SRA) has supported the industry’s call for a two-tier tax on sweetened beverages that would favor drinks made entirely with locally produced cane sugar.
SRA Administrator Pablo Azcona said beverages using local sugar should remain under the lower tax tier, while those containing imported artificial or alternative sweeteners should face higher rates.His statement followed a Sept. 21 petition from the United Sugar Producers Federation, Philippine Sugar Millers Association, Luzon Federation of Sugarcane Growers, Mindanao Federation of Sugarcane Growers and Philippine Association of Sugar Refiners.The groups proposed retaining the P6-per-liter tax on beverages made with local sugar and imposing a P12 tax — or a higher rate — on those using other sweeteners.Under the Tax Reform for Acceleration and Inclusion Law, beverages sweetened with local cane sugar and artificial sweeteners such as sucralose and aspartame are taxed at P6 per liter. Those containing high-fructose corn syrup (HFCS) are taxed at P12 per liter.The proposed Promoting Growth, Revenue and Equity toward Socio-Economic Sustainability bill would raise the two rates to P20 and P40 per liter, respectively, while retaining the existing classifications and exemption for stevia.Azcona warned that raising the tax on cane sugar without separating it from imported artificial sweeteners could worsen the market distortion that followed the 2018 tax reform.When HFCS was subjected to the higher P12 tax, beverage manufacturers reduced its use but shifted to artificial sweeteners instead of local sugar, he said. The use of imported substitutes continued to increase as sugar prices rose.Industry data showed imported artificial sweeteners accounted for 18.4 percent of the sweetener market over the past two crop years, displacing the equivalent of more than 503,000 metric tons of sugar.Demand for refined sugar fell by 13.9 percent, while local cane sugar’s share of the domestic refined sugar market declined to 59.4 percent from 65.8 percent.HFCS imports also dropped to 15,901 metric tons, but artificial sweeteners — not locally produced sugar — captured the market share they lost.Azcona said giving local cane sugar a tax advantage would support Filipino farmers because competing sweeteners are imported.
