The Sugar Tax Will Affect Minimum Wage Workers the Most

There are a lot of new laws coming into play lately, but one that has really caught our attention is HB 292 – the Sweetened Beverage Tax (SSB Tax) aka the ‘sugar tax’. According to the government, they are hoping to create a simple, fair and more efficient tax system to promote investments, create jobs, and reduce poverty. Unfortunately, it doesn’t look like the sugar tax will be helping with the latter; if anything, it could pose a financial problem for those who simply do not have the luxury to spend more on products with sugar in them.

What we know so far is that the sugar tax aims to impose a whopping 10-peso increase for beverages that contain purely locally-produced sugar, and an even higher 20-peso increase for all other sweeteners – local and imported, caloric and non-caloric. (Read the complete bill here.) 10 to 20 pesos might not sound like a lot to some of you, but we live in a country where most of the people will agree that every peso counts. So, even if it’s just 10 pesos, that is still a lot for many Filipino people, especially those who do not make a lot of money. This includes jeepney drivers, household help, and even fresh graduates who have decided to step into the workforce at minimum wage. After all, why would you want to spend more of your hard-earned money on something that used to be an affordable everyday commodity?

Juice

The industries that are currently against the sugar tax are not anti-tax per se, rather they are for broad-based and fair tax systems. Zeroing in on sweetened beverages will definitely hurt the regular consumer. According to the bill proposed by Cong. Estellita Suansing, local 3-in-1 coffee will be taxed, but coffee made in-store, such as those from coffee shops, will not. The sad part is that the people who can afford expensive frappuccinos are probably those who have more money to spare, whereas a lot of those who rely on drinking coffee made from 3-in-1 sachets are actually the ones who don’t have the extra money to spend on it.

Lottie

It should be noted that minimum wage workers in the Philippines do not pay income tax and thus do not benefit from the lowering of income tax rates. With the sugar tax, it feels like they will be tasked to make up for that whenever they shell out more money on sugary items since 80% of these are consumed by the lower income class (this is according to a study by AC Nielsen in 2016).

That aside, the sugar tax will also affect owners of sari-sari stores that hugely depend on beverage sales, as well as sugar farmers who might experience a drop in income because of the price increase. Ultimately, the increase in prices will have the most impact on the poorest segments in the country, which seems to be the opposite of what the government is hoping to achieve. So: is the sugar tax really a good idea for the Philippines? What are your thoughts on this?






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