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Proposed taxes on junk food, sugary drinks face opposition from foreign chambers, highlight Impact on small enterprises

The Joint Foreign Chambers of the Philippines (JFC) have voiced their concerns over the proposed plan by President Bongbong Marcos Jr.’s administration to implement new taxes on junk food and increase the tax on sugar-sweetened beverages.

In a statement released, the JFC cautioned that these additional taxes could lead to inflation and discriminatory impacts on specific businesses.

Highlighting the country’s ongoing recovery from the pandemic and the lingering effects of high inflation, the JFC said, “We believe it is not the right time to introduce additional taxes on products primarily consumed by middle and lower-middle-class households.”

The JFC is composed of prominent chambers of commerce, including the American Chamber of Commerce of the Philippines and the European Chamber of Commerce of the Philippines.

Instead of pursuing new taxes, the JFC recommended that the government focus on enhancing tax administration, such as implementing the proposed Ease of Paying Taxes Act. They also suggested exploring non-tax interventions as viable alternatives to boost government revenues and improve public health.

The JFC emphasized the importance of conducting a comprehensive study on the impact of the existing tax on sugar-sweetened beverages, as imposed by the TRAIN Law, before considering further taxation measures.

While acknowledging the government’s objective to generate revenue and promote healthier lifestyles, the JFC cautioned that the proposed taxes could strain businesses already grappling with raw material sourcing challenges.

Furthermore, they expressed concern over the potential negative effects on small enterprises, such as sari-sari stores, which rely on the sale of these products.

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