The passage of the Tax Reform for Acceleration and Inclusion (TRAIN) act increases the tax imposed on sugar-sweetened beverage and cigarettes - paving for better health promotion programmes, as well as allowing for initiatives that lower the price of many maintenance medicines.
President Rodrigo Duterte signed the TRAIN Act along with the national budget for 2018 (General Appropriations Act) mid-December and said that the new law will benefit 99 percent of Filipinos.
The Department of Health (DOH) hailed the passage of the TRAIN Act, which provides tax breaks for Filipinos, increases the excise tax for petroleum products, automobiles and introduces the tax for sugar-sweetened beverages.
For the health sector, the TRAIN Act will enable various DOH programmes for the promotion of healthy lifestyles and the prevention and control of non-communicable disease in general, according to Secretary of Health Francisco Duque III.
“With millions of Filipinos who have became overweight and obese, and with diabetes now afflicting millions more of our countrymen, we support a higher pricing policy for less healthy food and beverages as part of a multi-pronged strategy to combat non-communicable diseases,” Secretary Duque told a group of reporters.
The World Health Organization (WHO) also commended the new law as Philippines is the first in Asia to introduce such tax for sugar-sweetened beverages.
Medicines and sweetened beverages
The Health chief noted that the law supports initiatives of the department in lowering the prices of medicines by exempting from the 12 percent Value Added Tax (VAT) all medicines used for diabetes, high cholesterol and hypertension.
Secretary Duque further vowed that DOH will monitor drug prices to ensure that medications will be affordable for consumers.
With regards sugar-sweetened beverages, prices are expected to increase by Php 5.00 to 10.00 per liter - depending on the type of sweetener used - on all sweetened beverages.
The Department of Finance (DOF) said that the SSB is proposed to promote a healthier Philippines. There are around 3.5 million cases of diabetes in the country, according to the International Diabetes Foundation (IDF).
The SSB’s goal is to encourage the family to opt for healthier drinks.
Included in the SSB are sugar-sweetened juice drinks, sugar-sweetened tea and coffee, soda, powdered drinks, flavoured water and energy drinks.
More funding for UHC
Another plus point for the TRAIN Act is it provides for more funding for Universal Health Care (UHC).
“The additional resources generated by this measure can be utilized in subsidizing the national government’s health care reform agenda of providing universal health care to Filipinos,” said the DOH.
A part of the tax revenue will go to PhilHealth to fund the programmes related to obesity, such as diabetes, stroke, heart attacks and end-stage renal disease (ESRD).
The DOH commented that this action is in line with the WHO’s call to member states in curbing sweetened-products intake of their respective populations through taxation.
The call reads, “Make use of taxation measures raising by at least 20 percent the retail price of sugary drinks to influence the purchasing and dietary choices of their populations.”
30 percent to social service
However, only 30 percent will go to social services - which the Health secretary admitted was too small.
When asked to expound, he explained, “We’ve written the president with regard to that. We’ll just have to await what the Office of the President will say with regard to our take on the issue that [it is small].".
DOH Undersecretary Dr Lilibeth David said that more than half of the TRAIN is allocated to the ‘Build, Build, Build’ programme of the government.
“For the TRAIN, the earmarking is 70 percent allocation for the ‘Build, Build, Build’ programme of the government and 30 percent for all social sector projects, including also the self-reliance of sugar farmers,” said the Health official said.
Still, the department was grateful for the allocation, however minimal because it will allow them to push through with health promotion programmes.
At the same time Secretary Duque said there should be complementary policy instruments to the programmes, such as educational campaigns, informative food labelling, and subsidies for healthy food items.
“We thank the President and both houses of Congress for prioritizing this vital tax measure which boosts the DOH campaign for healthy lifestyles,” the Secretary concluded. MIMS
Taxing sugar-sweetened beverages not the solution to obesity