PH gov’t orders scrutiny over tax payments among beverage makers
The Department of Finance (DOF) has directed the Bureau of Internal Revenue (BIR) to determine whether beverage manufacturers are paying the correct amount and type of tax as mandated under the Tax Reform for Acceleration and Inclusion (TRAIN) Law.
This was after uncovering possible discrepancies in their tax payments, which left a P10 billion shortfall in the excise tax collection target for the first 10 months of the year.
Finance Undersecretary Karl Kendrick Chua said the excise tax collection target on sugar-sweetened beverages (SSB) as of October 2018 was set at P40 billion, but the BIR has so far collected only around P30 billion, possibly because SSB manufacturers might not be paying the correct taxes.
Despite the shortfall, Finance Secretary Carlos Dominguez III noted that the SSB tax has significantly contributed to the state coffers, bringing in an additional P100 million a day in revenues, or about P3 billion a month.
Around P100 million a day was the operational target set by the DOF for the collection of the SSB tax.
The TRAIN Law mandates a P6-per-liter excise tax on beverages using caloric and non-caloric sweeteners and P12 per liter on beverages using high-fructose corn syrup (HFCS). Milk and 3-in-1 coffee mixes are exempted from this tax.
“My hunch is that those that are supposed to pay the P12 tax are only paying P6,” Chua said during a recent DOF Executive Committee (Execom) meeting.