BIR to levy 16 tax per liter on caloric sweeteners, 112 on high-fructose drinks

The Bureau of Internal Revenue (BIR) has released the guidelines imposing excise tax on sweetened drinks pursuant to the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

Sweetened beverages refer to nonalcoholic liquid and powdered drinks that are packaged containing caloric (natural) or non-caloric (artificial/ chemical) sweet substances.

They included juice drinks, tea, carbonated beverages, flavored water, energy and sport drinks, cereal beverages and other nonalcoholic drinks that contain added sugar.

As per Revenue Regulations No. 20-2018, a 16 tax per liter will be imposed on drinks “using purely caloric, non-caloric sweeteners or a mix of caloric and non-caloric sweeteners” and 112 tax per liter for drinks “using purely high fructose corn syrup or in combination with any caloric or non-caloric sweetener.”

Caloric sweeteners include sucrose, fructose and glucose that produces a certain sweetness while non-caloric sweeteners are substances which can be directly added to beverages such as aspartame, sucralose, saccharin, acesulfame potassium, enotame, cyclamates and other non-nutritive sweeteners approved by the Codex Alimentarius and adopted by the FDA.

High fructose corn syrup refers to sweet saccharide mixture containing containing fructose and glucose which is derived from corn and added to provide sweetness to beverages.

Excluded from excise tax are all milk products like infant formula, powdered and flavored milk as well as products using coconut sap sugar.

The collection of the tax is retroactive to Jan. 1, 2018 when the TRAIN Law took effect.

The 18-page Revenue Regulations No. 20-2018 provides the time, place, and manner of filing return and payment of excise tax.

Penalties range from cancellation of permit to engage in business to filing of tax evasion charges and sending the guilty to jail.