By Beatrice M. Laforga
THE Department of Finance (DoF) said it is studying proposals to tax salty food as a health measure, including the practicalities of such a scheme and its possible impact on inflation.
In a phone message yesterday, Finance Undersecretary and chief economist Gil S. Beltran said the department is studying a taxation proposal based on salt content put forward by the Department of Health (DoH).
“We are still studying the tax rate and tax base,” Mr. Beltran said in a mobile phone message.
After tax rates are determined, he said the impact on inflation can then be estimated.
“When we decide, (data on the) impact on inflation will be available,” he said.
In a separate phone message, Finance Secretary Carlos G. Dominguez III told reporters that the DoF needs to clarify the DoH proposal.
“Have to discuss thoroughly with them,” Mr. Dominguez said last week.
The DoH is currently studying raising taxes on salty foods in an attempt to reduce consumption after World Health Organization (WHO) reported that Filipinos’ consumption on salty foods exceeds the organization’s recommendation.
However, the Health Department has yet to release a detailed plan.
The government currently taxes “sin” products like alcohol and tobacco, as well as sugar-sweetened drinks, on health policy grounds, in order to reduce future health care costs for the broader population. Excessive salt consumption is linked with hypertension, which over the long term could develop into various cardiovascular diseases as well as impaired kidney function.
Mr. Beltran said that the DoF’s study will be done within the month as it is still considering the types of foods that might fall under the category of “salty food.”
UnionBank of the Philippines, Inc. chief economist Carlo O. Asuncion said higher taxes on this “highly weighted food group” could add around 0.1 to 0.3 percentage points to inflation but “the actual tax rate will dictate the actual impact.”
“Pinoys love their salty food. Tuyo, daing and dilis come to mind,’ he said, referring to varieties of dried fish. “These are staples in most Filipino households. If the tax proposal happens, there may be an obvious bump in inflation but it is likely to be temporary. People will adjust. The tax idea is not bad at all if the goal is primarily health-related, though,” Mr. Asuncion said in a mobile phone message.