The Sugar Regulatory Administration (SRA) has pushed for the restructuring of the excise on sweetened beverages, arguing that beverages made with natural cane sugar should be subject to lower taxes.

SRA Administrator Pablo Luis Azcona said the regulator is pushing for beverages containing natural cane sugar to remain under Tier 1, while beverages made with artificial sweeteners are placed under Tier 2.

Azcona said the SRA hopes that the excise on beverages with natural cane sugar would remain at P6 per liter, or slightly increase it at the most, to avoid affecting both Filipino farmers and consumers.

“The farmers’ suggestion, which is also our stand, is first, the most important thing to do is separate sugar from everything else. Let’s remove all [artificial sweeteners] from the lower tier, all that is not sugar, cane sugar,” Azcona said. “Our prayer is to keep [the excise on sugar] at P6 per liter. If the DOF (Department of Finance) determines an increase, we’re willing to sit down and talk about it,” he told reporters.

“We noticed that when we imposed a higher tax on HFCS (high-fructose corn syrup), manufacturers simply looked at the tax rates and saw that HFCS has higher taxes than artificial sweeteners. They shifted to artificial sweeteners,” Azcona said, noting that artificial sweeteners are cheaper since these require only a small amount to reach the desired level of sweetness.

“At the end of the day, the government didn’t generate additional revenues. Revenue remained the same,” he added.

The Philippine Sugar Millers Association Inc. (PSMA) had urged the DOF to reconsider its proposal to increase the excise on sugar-sweetened beverages as this could affect local sugar farmers amid pest infestations, El Niño and other production challenges.

“The government is encouraging sugar farmers to continue cultivating sugarcane and has recently extended emergency assistance, or ayuda, to farmers struggling to recover from severe RSSI (red-striped soft-scale insect) infestation. Yet the DOF is proposing a tax measure that could further weaken demand for the very sugar these farmers produce,” PSMA executive director Jesus Barrera said.

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Under the Promoting Growth, Revenue, and Equity towards Socio-Economic Sustainability Bill, the government seeks to raise the excise to P20 per liter from only P6 per liter on beverages that use sugar or other caloric or noncaloric sweeteners.

The proposed measure also calls for an increase in excise on beverages using HFCS.from P12 to P40 per liter.

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