Mondelez calls P10/liter sugar tax ‘unfair’

SNACK company Mondelez has expressed “serious concerns” about the government’s proposed P10 per liter tax on sugar-sweetened beverages, calling the proposal premature and unfair.

“As Mondelez, and as an industry, we have serious concerns about the bill that the Senate is reviewing right now and we have real concerns about how that is structured on its taxation rate proposal, which is per volume liter,” said Shanahan Chua, head for corporate affairs and government affairs for the Philippines, Indonesia, Taiwan, Hong Kong and Singapore.

Mr. Chua was referring to the tax reform measure recently passed by the House of Representatives, which includes a provision that imposes a P10 excise tax on every liter of sugarsweetened beverages containing locally made sugar, while others will be taxed P20 a liter.

He made the statement when asked about the company’s stand on the tax proposal during the launch of a new product, Oreo Thins.

“As a member of BIAP (Beverage Industry Association of the Philippines), what we want is to urge the government to take a step back and have a dialogue and continue the dialogue with us to look at this, and to really take more time to have a fairer taxation system,” he added.

The group has a number of beverage lines like Tang but also owns brands like Cadbury’s, Nabisco and Toblerone

Senator Juan Edgardo M. Angara is looking into imposing excise tax depending on the sugar content of the beverage, instead of taxing at P10 per liter. He said a P10-excise tax might be too high, as this would raise the prices of some drinks by 50%.

“What we are looking at as an industry is to echo what Sen. Angara was saying,” Mr. Chua said.

Aishish N. Pisharodi, Mondelez country head for the Philippines, said the company is not against taxation but what it is against is the way the bill is currently drafted.

“There are ways to achieve objectives and still pay tax and that’s what we are discussing right now — how to make it constructive, how to make it sustainable and at the same time contribute to the goals of the government,” he said.

He said the company and the industry want to hold more “constructive talks” with the government because they feel that imposing the tax is premature. —