Assessing the implementation of excise tax on sweetened beverages on manufacturing companies in the Philippines: Basis for tax reforms

• Main Authors: Gacal, Francesca Glen Esteban, Reyes, Francesca Beatriz Agamata, Wong, Mireah Kyra Molina, Yap, Dominique Bianca Uy
• Format: text
• Language: English
• Published: Animo Repository 2022
• Subjects: Beverages—Taxation—Philippines; Food and Drug Law; Taxation; Tax Law
• Online Access: https://animorepository.dlsu.edu.ph/etdb_acc/25; https://animorepository.dlsu.edu.ph/cgi/viewcontent.cgi?article=1052&context=etdb_acc
• Institution: De La Salle University

The Philippine excise tax on sweetened beverages (SBs) was introduced to decrease the risk factors for non-communicable diseases (NCDs)— the leading cause of death in the Philippines and in the world. The study aims to generate potential reforms that balance the interests of SB manufacturers and the purported health objectives of the Philippine SB tax. The viewpoints of legislators, the public health sector, SB manufacturers, and researchers were studied. SB manufacturers are represented by Coca-Cola Beverages Philippines Incorporated (CCBPI), the market leader with a 42.1% market share. Officials from the Department of Health (DOH), in representation of the public health sector, and the CCBPI Indirect Tax Manager, whose responses were validated by the CCBPI Head of Tax, were interviewed. Legislative records and documents were studied for the legislators’ perspective, while published literature was analyzed for the researchers’ viewpoint. This research utilized the Input-Process-Output model; content analysis and thematic analysis; and coding via the software NVivo in the conduct of an in-depth case study. The study found that the current SB tax regime is more acceptable to SB manufacturers in terms of tax compliance, tax planning, and sales volume, while a tiered volumetric tax based on sugar content is the preferred design to achieve the health objectives of the tax through inducing reformulation. Two alternatives as basis for reforming to a more appropriate tax design were presented. Theoretical and practical recommendations for the aforementioned stakeholders were generated in the culmination of the paper.