The Philippine Sugar Millers Association (PSMA) called on the Department of Finance (DOF) to implement a more stringent tax collection system instead of increasing the excise tax on sweetened beverages.
The lobby group issued the appeal after Finance Secretary Benjamin Diokno bared plans last week of a tax on junk food and increasing the tax on sweetened drinks to P12 to help fund public health programs and generate P76 billion in new revenue each year.
But Jesus Barrera, PSMA executive director, would rather that the DOF “prioritize the enforcement of existing laws to ensure compliance and fairness” instead of increasing taxes.
“Just recently, the Bureau of Internal Revenue (BIR) raided a warehouse in Cavite because one beverage maker failed to pay P800 million in excise taxes due on the sweetened beverages it manufactures,” he noted.
The PSMA also said three supermarkets in Quezon City were raided by the BIR for distributing untaxed sweetened beverages.
“The latest efforts of the BIR to inspect manufacturers and retailers on their payment of the excise tax are commendable. The additional revenue can be realized from the thorough enforcement of the existing tax laws. Furthermore, what purpose does it serve to raise tax rates if there exist individuals or companies that fail to adhere to them,” he said.
According to the PSMA, increasing the tax collection efficiency does not only spare particular sectors from anxiety but also help achieve the government’s health and revenue objectives.
“The significance of an effective tax collection mechanism extends beyond public health concerns. It offers a reliable source of revenue for the government that is directed towards essential public services and reinforces public trust, particularly in the aftermath of the pandemic as the economy recovers,” the PSMA said.
According to the group, the DOF needs to conduct a comprehensive dialogue with stakeholders, including sugar millers, sugarcane farmers and industry experts on the planned increase in excise tax.
The PSMA counts 16 mills as members producing 78 percent of the country’s sugar production.
