Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

NINETEENTH CONGRESS
First Regular Session

Hduse BNO. 7485

Introduced by Rep. Ray T. Reyes

EXPLANATORY NOTE

This bill seeks to increase the excise tax on sugar-sweetened beverages to
lessen the consumption of sugary beverages and increase the budget for the
implementation of Republic Act No. 11223, otherwise known as the Universal Health
Care Act.

Larry Summers, former Secretary of the United States of America Treasury,
said “if we want to improve global health, we need to tax the things that are killing us.
Taxing things that are bad for your health, like tobacco, over things like savings and
income is as close to a free lunch as you can get in economics. The economic
rationale for taxing these products is strong if we want to save lives and make a
better, healthier world.”

Data from the Philippine Statistics Authority (PSA) revealed that from January
to December 2020, diabetes ranked fourth among the leading causes of death in the
Philippines. One significant factor is the consumption growth of highly processed
foods and sugary beverages. It is therefore proper to increase the excise tax on
sweetened beverages as proposed under this bill.

Republic Act No. 10963, otherwise known as the Tax Reform for Acceleration
and Inclusion (TRAIN), was enacted not only to correct some deficiencies in the tax
system to make it simpler, fairer and more efficient but also to introduce an excise
tax on sweetened beverages, among other products. In addition, TRAIN law
provides for the disposition of revenues from the excise tax on sweetened beverages
and other products. Accordingly, fifty per cent (50%) of the total revenues collected
from the excise tax on sweetened beverages shall be allocated and used exclusively
in the following manner:


1. Eighty per cent (80%) to the Philippine Health Insurance Corporation
(PhilHealth) for the implementation of Universal Health Care Act; and

2. Twenty per cent (20%) shall be allocated nationwide, based on political and
district subdivisions, for medical assistance, the Health Facilities
Enhancement Program (HFEP), the annual requirements of which shall be
determined by the Department of Health.

Despite the additional allocation for PhilHealth for implementing the Universal
Health Care Act, a budget deficit still hinders its full implementation. Health spending
in the past years has risen due to the pandemic, but its share in the national budget
remained the same.

This bill seeks to advance health equity by generating revenue for the
government, which is proposed to finance the implementation of the Universal Health
Care Act. With additional budget, the objectives of the Universal Health Care Act to
promote the Filipinos’ right to health, equitable access to quality and affordable
health care, and healthy living conditions will be realized

Furthermore, levying a tax on unhealthy products, particularly sugary
beverages, will be a win-win situation for the country as not only thousands of
premature deaths due to soaring non-communicable diseases could be prevented,
but the impact of this tax would increase government revenues.

In view of the foregoing, the immediate passage of this bill s earnestly sought.

Y!

Representétive, atabngan Pai ist.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

NINETEENTH CONGRESS
First Regular Session

a eo snece
HOUSE BILL.NO. 77485

Introduced by Rep. Ray T. Reyes

AN ACT
INCREASING THE EXCISE TAX ON SUGAR-SWEETENED BEVERAGES,
AMENDING FOR THE PURPOSE THE NATIONAL INTERNAL REVENUE CODE,
AS AMENDED

Be it enacted by the Senate and the House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Section 150-B of the National Internal Revenue Code, as amended, is
further amended to read as follows:

“SEC. 150-B. Sweetened Beverages. -

*(A) Rate and Base of Tax. — Effective January 1, [2048]
2024

“(1) A tax of [Six] EIGHT pesos [(P6.00)] (P8.00) per liter
of volume capacity shall be levied, assessed and collected on
sweetened beverages using purely caloric sweeteners, and
purely non-caloric sweeteners, or a mix of caloric and non-
caloric sweeteners: Provided, further, That this tax rate shall not
apply to sweetened beverages using high fructose corn syrup:
Provided, further, That sweetened beverages using purely
coconut sap sugar and purely steviol glycosides shall be exempt
from this tax; and

“(2) A tax of [Twelve] FIFTEEN pesos [(P42.00)] (P15.00)
per liter of volume capacity shall be levied, assessed, and
collected on sweetened beverages using purely high fructose
corn syrup or in combination with any caloric or non-caloric
sweetener.

XxX.


SECTION 2. Section 288-A of the National Internal Revenue Code, as amended, is
further amended to read as follows:

“SEC. 288-A. Disposition of Revenues from Excise Tax on Sweetened
Beverages, Alcohol, Tobacco Products, Heated Tobacco Products, and Vapor
Products. —
*(A) Revenues from Excise Tax on Sugar-Sweetened
Beverages [from Republic Act No-10963]. — xx
“xxx”
“(D) xxx’
SECTION 3. All laws, decrees, orders, and issuances, or portions thereof,
which are inconsistent with the provisions of this Act, are hereby repealed,
amended or modified accordingly.

SECTION 4. This Act shall take effect fifteen (15) days after its publication in
the Official Gazette or in a newspaper of general circulation.

Approved,