Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

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fs RECEIVED A
= pyre, 1 ONOV 20138

SIXTEENTH CONGRESS
First Regular Session

H. No. 3865

Introduced by Representative Estrellita “Ging” B. Suansing

EXPLANATORY NOTE

Our country has seen and experience the most destructive typhoon ever
recorded in world history. Likewise for 2013, strong typhoons such as Santi and
Yolanda destroyed Central Luzon and the Visayas Regions, respectively. Lives were
lost and properties were heavily damaged.

Filipinos are resilient and can rise above all these calamities. However,
necessary funds and revenues for the rehabilitation are needed.

Thus, this bill seeks to impose a ten percent (10%) ad valorem tax on
softdrinks and carbonated drinks.

At present, the softdrinks industry is being subject to VAT, income tax,
withholding tax, local and real property taxes and customs duties.

On the other hand, flavored or coloured syrups used in the manufacturing of
softdrinks are not subject to excise tax but only to twelve percent (12%) VAT and
customs duties, if imported.

Taxation of non-alcoholic beverage is not a new concept. Other countries like
USA, France, Netherlands and Finland have realized the need to impose taxes on
softdrinks and carbonated drinks.


Aside from the rehabilitation fund, another purpose of the bill is to curb the
consumption of softdrinks and carbonated drinks. There have been studies which
have shown that consumption of said types of goods increase the risk of developing
health problems such as blood sugar disorders, obesity, diabetes and other related
diseases like bone fractures, hyperacidity, tooth decay and heart problems

In view of the foregoing, approval of the bill is earnestly sought.
‘

Rep. ESTRELLITA “GING” B. BUANSING
41* District, Nueva Ecija|


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

H.No. 3365

Introduced by Representatives Estrellita “Ging” B. Suansing

AN ACT
IMPOSING A TEN PERCENT (10%) AD VALOREM TAX ON SOFTDRINKS AND
CARBONATED DRINKS BY INSERTING A NEW SECTION IN THE NATIONAL
INTERNAL CODE, AS AMENDED

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

SECTION 1. A new section, designated as Section 150-A under Chapter VI,
Title VI of the National Internal Revenue Code (NIRC) of 1997, as amended, is
inserted to read as follows:

“SEC. 150-A. SOFTDRINKS AND CARBONATED DRINKS. —
THERE SHALL BE LEVIED, ASSESSED AND COLLECTED A TEN
PERCENT (10%) AD VALOREM TAX ON SOFTDRINKS AND
CARBONATED DRINKS SOLD IN BOTTLE AND OTHER TIGHT
CONTAINER.


SEC. 2. For purposes of this Act, the following terms are defined as:

A) “SOFTDRINKS” ARE UNDERSTOOD AS CARBONATED DRINKS
SUCH AS COKE, PEPSI, RC COLA, AND THE LIKE, AND
ARTIFICIALLY OR NATURALLY FLAVORED DRINKS OF LESS THAN
TEN PERCENT (10%) NATURAL FRUIT OR VEGETABLE JUICE
SUCH AS MOUNTAIN DEW, ROYAL, SPRITE AND 7-UP AND ARE
SOLD IN BOTTLES AND OTHER TIGHT CONTAINERS.

B) “CARBONATED DRINKS” AS AERATED POTABLE WATER,
WHETHER OR NOT CONTAINING ADDED SUGAR OR OTHER
SWEETENER OR FLAVOR, AND OTHER NON-ALCOHOLIC
BEVERAGES WHICH ARE CHARGED UNDER PRESSURE WITH
CARBON DIOXIDE GAS AND ARE SOLD IN BOTTLES AND OTHER
AIR TIGHT CONTAINERS; PROVIDED, THAT CARBONATED DRINK
SHALL INCLUDE, BUT NOT LIMITED TO, THOSE ARE POPULARLY
KNOWN AS SOFTDRINKS, CARBONATED BOTTLED WATER,
ENERGY SPORT OR ISOTONIC AND NUTRACEUTICAL DRINKS.

SEC. 3. Rehabilitation Fund. — The amount to be collected under this Act
shall be designated as the Rehabilitation Fund for victims of calamities to be allotted
for the rehabilitation program such as livelihood development, mass housing, road
construction and other infrastructure projects on municipalities, cities and provinces
affected by severe and destructive natural calamities.

SEC. 4. Implementing Rules and Regulations. The Secretary of Finance,
upon consultation with the Secretary of Budget and Management and Commissioner
of Internal Revenue shall promulgate the necessary rules and regulations for the
effective implementation of this Act.

SEC. 5. Separability Clause. — If any part of this Act shall be held
unconstitutional or invalid, other parts not otherwise affected thereby shall remain in
full force and effect.


SEC. 6. Repealing Clause. - All other laws, decree, rules and regulations or
parts thereof which are inconsistent with the provisions of this Act are hereby
repealed, amended or repealed accordingly.

SEC. 7. Effectivity. — This Act shall take effect fifteen (15) days following its
publication in the Official Gazette or in at least two (2) newspapers of general
circulation

Approved,