The House Committee on Ways and Means on Monday called on government agencies to get their acts together to prevent an increase in deficit in the targeted excise tax revenues after both the Bureau of Internal Revenue and Bureau of Customs incurred P12.3 billion deficit in the 2018 collection of excise taxes for sweetened beverages.

1 6 - House Ways and Means panel calls on agencies to arrest huge deficit in excise taxes on sweetened beverages

In a virtual committee meeting presided over by Albay Rep. Joey Sarte Salceda, the House panel also adopted House Resolution No. 1242 expressing the Lower Chamber’s strong opposition to the planned liberalization or deregulation of sugar importation.

Visayan solons who authored the resolution warned that deregulation of sugar importation will be highly detrimental to the welfare of over 800,000 sugar farmers and industry workers across 28 provinces in the country.

Authors of HR 1242 noted that the proposal to liberalize sugar importation is being pursued as a result of allegedly higher local sugar prices

Negros Occidental Rep. Francisco Benitez, one of the authors of HR 1242, stressed that unregulated entry of subsidized imported sugar will be disastrous to the domestic sugar industry which contributes an estimated P96 billion to the Gross Domestic Product, and more importantly to 84,000 sugar farmers and 720,000 industry workers, and across 28 provinces in the country,
The authors said major sugar exporting countries such as Thailand and India can sell their excess sugar at below cost of production because they provide massive subsidies and other forms of protection such as domestic and export support prices to their sugar farmers and sugar industries.

On the other hand,   Filipino sugar farmers, most of whom are small farmers and agrarian reform beneficiaries, get minimal support and cannot afford to sell their sugar below costs.

During a hearing on Monday, Nueva Ecija Rep. Estrellita Suansing cited several challenges on the implementation of the excise tax in sugar sweetened beverages under Republic Act 10963 or the TRAIN law. 

In her report to the committee, Suansing noted the deficit in the collection of excise tax during the first of its implementation in 2018, saying out of P52 billion target, the total collection of the BIR and the BOC reached only P39.8 billion resulting in a deficit of P12.3 billion. 

Suansing filed HR 227 proposing a congressional inquiry by the ways and means panel into the implementation of the imposition of excise tax on sweetened beverages at a rate of P6 and P12, depending on the type of sweetener used.

Lawmakers want to plug loopholes in the implementation of the law as they noted the huge deficit incurred compared to the targeted collection.

Suansing, ways and means panel vice chairperson, noted that only a handful manufacturers have registered with the BIR in the first few months of the implementation of the law.

This may have been borne out of the fact that the Food and Drugs Administration does not have adequate product testing of supposed sugar-based products and lacks a strong post marketing surveillance program.

Suangsing said the BIR should not exempt products from the payment of excise tax unless with prior FDA approval and certification of exemption.

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