The Joint Foreign Chambers of the Philippines asked the government to reconsider its proposal to impose new taxes on junk food and increase the existing tax on sugar sweetened beverages.
The group said it is not the right time to introduce additional taxes on products primarily consumed by middle and lower middle-class households because the country is still recovering from the pandemic and a prolonged period of high inflation.
“While we recognize the need for government to boost revenues and support initiatives to improve the health and well-being of Filipinos, we recommend careful reassessment of any proposal to impose additional taxes that will be inflationary for Filipino consumers and discriminatory to certain businesses,” the group said.
The proposal would also affect micro and small enterprises that retail these products as a source of income, they said.
JFC said additional tax impositions will only strain the capacity of businesses in affected sectors to continue operations and grow their businesses, especially when issues related to the supply of certain raw materials remain unresolved.
“This could potentially reduce competition in the market to the detriment of Filipino consumers and the growth of the economy driven by consumption. Instead, we recommend that the impact on consumption and health of the existing SSB tax imposed under Republic Act 10963, otherwise known as the TRAIN Law, be fully studied and presented before any additional taxes are imposed,” it said.
“We also strongly recommend the prioritization of improvements to tax administration such as in the proposed Ease of Paying Taxes Act and non-tax interventions as alternative, non-inflationary measures to raise government revenues and improve health outcomes of Filipinos,” JFC said.
The JFC is composed of the American Chamber of Commerce of the Philippines, Australian-New Zealand Chamber of Commerce of the Philippines, European Chamber of Commerce of the Philippines, Japanese Chamber of Commerce and Industry of the Philippines, Inc., Korean Chamber of Commerce Philippines and the Philippine Association of Multinational Companies Regional Headquarters, Inc.