You may want to rethink that carbonated drink that you usually have during your merienda break. The Department of Finance (DoF) through the Bureau of Internal Revenue (BIR) has issued Revenue Regulations (RR) No. 20-2018, prescribing the imposition of excise tax on “Sweetened Beverages” as provided under the “Tax Reform for Acceleration and Inclusion” (TRAIN) Law. The regulations are effective beginning January 1, 2018, the date of effectivity of the TRAIN Law.

RR No. 20-2018 defines “Sweetened Beverages” to refer to non-alcoholic beverages of any kind (liquid, powder, or concentrates) that are pre-packaged and sealed, contain caloric and/or non-caloric sweeteners added by the manufacturers, and shall include, but not be limited to the following:

-Sweetened juice drinks;

-Sweetened tea;

-All carbonated beverages;

-Flavored water;

-Energy and sports drinks;

-Other powdered drinks not classified as milk, juice, tea, and coffee;

-Cereal and grain beverages; and

-Other non-alcoholic beverages that contain added sugar.

From the definition of “Sweetened Beverages,” RR No. 20-2018 further defines the following beverage sweeteners:

Caloric sweetener – a substance that is sweet and includes sucrose, fructose, and glucose.

Non-caloric sweetener – a substance that is artificially or chemically processed and is directly added to beverages, such as aspartame, sucralose, saccharin, acesulfame potassium, neotame, cyclamates and other non-nutritive sweeteners.

High fructose corn syrup (HFCS) – a sweet saccharide mixture containing fructose and glucose which is derived from corn and includes other similar fructose syrup preparations.

So how is the excise tax on sweetened beverages levied? According to RR No. 20-2018:

If the beverage contains purely caloric sweeteners or purely non-caloric sweeteners or is a mixture of caloric and non-caloric sweeteners, the excise tax rate is P6.00/liter of volume capacity;

If the beverage contains purely HFCS or is a mixture of HFCS and any caloric or non-caloric sweetener, the excise tax rate is P12.00/liter of volume capacity;

If the beverage contains purely coconut sap sugar and purely steviol glycosides, it is exempt from excise tax. However, not all sweet beverages are subject to excise tax, and these include the following:

– All milk products, including plain milk, infant formula milk, follow-on milk, growing up milk, powdered milk, ready-to-drink milk, flavored milk, and fermented milk. The regulations note that dairy products are not synonymous to milk products and are not covered by the exemption.

– Soymilk and flavored soymilk;

– One hundred percent natural fruit juices (any amount of sugar or sweetener added will render the beverage excisable);

– One hundred percent natural vegetable juices (any amount of sugar or sweetener added will render the beverage excisable);

– Meal replacement and medically indicated beverages, which include oral nutritional therapy products and oral electrolyte solutions formulated to prevent dehydration due to illness;

– Ground coffee, instant soluble coffee, and pre-packages powdered coffee products.

With the issuance of RR No. 20-2018, your favorite beverage, instead of giving you the short burst of energy that only a sugar rush can give, will instead leave a bitter taste in the mouth.

Manila Times Source

ATTY. PEACHES ARANAS

Managing Partner LMA LAW