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Background of The Study
Background of The Study
INTRODUCTION
Any liquid that can quench the thirst are called beverage. Beverage is any kind of
liquid. We are always taking water, Water is a beverage item. Water, tea, coffee, milk, juice,
beer and any kind of drinks item are listed in beverage items. Actually, beverage means any
kind of Liquid item. Sugar is the generic name for sweet-tasting, soluble carbohydrates, many
of which are used in food. There are various types of sugar derived from different sources.
Sugar-sweetened beverages are sweetened juice drinks, tea, and coffee, carbonated
beverages with added sugar, flavored water, energy and sports drinks, powdered drinks with
sugar, cereal and grain beverages, and other non-alcoholic drinks with sugar. SSBs refer to
non-alcoholic beverages of any constitution (liquid, powder, or concentrates) that are pre-
packed and sealed in accordance with the Food and Drug Administration (FDA) Standard
that contain sugar added by the manufacturers. Soft drinks, in particular, are drinks that
typically contain carbonated water, a sweetener, and natural or artificial flavoring. The
sweetener may be sugar, high-fructose corn syrup, fruit juice, sugar substitutes, or some
combination of these. Soft drinks may also contain caffeine, colorings, preservatives, and
other ingredients.
The proposed excise tax will make SSBs more expensive, thus reducing consumption
and encouraging the consumers to shift their purchases to healthier options. The SSB tax may
also be a good source of additional revenue for the government which will compensate for
the expected revenue loss from the proposed restructuring of the personal income tax (PIT)
under Package 1 of the Tax Reform for Acceleration and Inclusion (TRAIN).
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This study will help the consumers to understand what is the reason why they
proposed the excise tax on sugar-sweetened beverages. By this study they will know the
This study helps to determine the advantages and disadvantages of excise tax on
sugar sweetened beverages. More especially it seeks to find the answers to the following
questions.
2. What are the disadvantages of increasing the price of sugar sweetened beverages?
3. What are the advantages of increasing the price of sugar sweetened beverages?
This study is very significant because it focuses on the advantages and disadvantages
of excise tax on sugar-sweetened beverages. The findings of this study will help and benefit
the consumers considering that they are the one who experiencing it. It contains the
Definition of Terms
Consumer- it refers to a person who purchases goods and services for personal use.
Excise tax- are taxes paid when purchases are made on a specific good, such as gasoline.
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Compensate- to give (someone) something, typically money, in recognition of loss,
Revenue- is the amount of money that a company actually receives during a specific period,
This study focuses on the advantages and disadvantages of excise tax on sugar-
sweetened beverages. The study was conducted only to the students of San Nicolas National
High School Ilocos. This research is limited only to the consumers who are consuming the
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CHAPTER II
According to Arado (2017), a thorough study and consultation with affected business
sectors and consumers are needed first before the implementation of the excise tax on sugar-
sweetened beverages, said Davao City Chamber of Commerce and Industry, Inc. (DCCCII).
"We'll have to really look into that in depth and maybe consult with the different sectors that
are affected because there might be some things that our lawmakers have not seen in terms of
the excise tax probably being levied on smaller consumers. I think it has to be studied in
depth before we consider an excise tax on sugar," DCCCII president Ronald Go said.
The excise tax on beverages with locally-produced sugar is in relation to the probable
implementation of House Bill 5636 or the Tax Reform for Acceleration and Inclusion (Train).
Section 150-A, in particular, says that there will be an excise tax of P10 for every liter of
sugar-sweetened beverages containing locally-produced sugar and P20 per liter excise tax for
others.Included in these sugar-sweetened beverages are sweetened juice drinks, tea, and
coffee, carbonated beverages with added sugar, flavored water, energy and sports drinks,
powdered drinks with sugar, cereal and grain beverages, and other non-alcoholic drinks with
sugar.
In earlier separate reports, DOF said Health Promotion Fund will be sourced out from
the revenues of this sugar excise tax should this be pushed through. Around 15 percent of the
The remaining 85 percent will be used for other programs of the government such as
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operationalization of measure for non-communicable disease prevention, sports facilities
provision, access of potable water in public schools and public places, and nutrition labeling.
According to Leonardo (2018), excise tax on sweetened beverages (SBs) is one of the
new taxes imposed under Republic Act (RA) 10963 or Tax Reform for Acceleration and
Inclusion (TRAIN) Law which took effect last Jan. 1. The Department of Finance (DOF)
along with Department of Health (DOH) support this as part of a comprehensive health
measure to curb the consumption of SBs and address the worsening number of diabetes and
obesity cases in the country, while raising revenue for complementary health programs that
Sweetened beverages, as defined under the TRAIN Law, are non-alcoholic beverages
of any constitution (liquid, powder, or concentrated) that are pre-packaged and sealed in
accordance with the Food and Drug Association (FDA) standards that contain caloric and/or
non-caloric sweeteners added by the manufacturers. Simply, these are beverages that contain
high level of certain sugars that are viewed to provide unnecessary or empty calories with
little or no nutrition.
Unfortunately, the following drinks that we’ve come to love are now taxed under
Section 47 of the TRAIN Law: sweetened juice drinks and tea; all carbonated beverages (e.g.
soft drinks, etc.); flavored water; energy and sports drinks; cereal and grain beverages; other
powdered drinks not classified as milk, juice, tea and coffee; and other non-alcoholic
beverages that contain added sugar. On a positive note, products that use purely coconut sap
sugar and purely steviol glycosides (stevia leaves extract) are exempt from the excise tax on
SB. The law also excludes from the scope of excise tax all milk products, 100 percent natural
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fruit and vegetable juices that do not have added sugar or caloric sweetener, meal
replacement and medically indicated beverages, and ground, instant soluble and pre-packaged
encounters high temperatures come summer time which fall during the months of March and
April. Hence, it is not a surprise to know that almost all Filipinos love to indulge in a variety
of cold drinks to beat the heat. As a matter of fact, a typical Filipino meal would normally
include an ice cold drink such as carbonated drinks - (more commonly known as “soft
Filipinos’ daily intake of these kind of drinks also proves that majority has an
inclination towards sweet goods and thus, showcase the myriad ways Filipinos enjoy sweets.
It is the propensity to indulge the Filipino sweet tooth which leads us to discuss an interesting
Representatives Horacio Suansing Jr. of the 2nd district of Sultan Kudarat and
Estrellita Suansing of the 1st district of Nueva Ecija sponsored House Bill (HB) 292 titled:
“An Act Imposing Excise Tax on Sugar Sweetened Beverages by inserting a new Section
150- A in the National Internal Revenue Code of 1997, as amended” to promote public health
and wellness.
rate of P10 per liter of volume capacity. In the explanatory note of HB 292 the sponsors of
the bill stated that this measure does not only seek to promote public health and wellness, but
also to provide additional revenue collections for our government, which will then be
allocated for the following proposed purposes: (a) 50 percent to the General Fund; (b) 20
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percent to the Department of Health for provision of medicines and medical assistance for
diabetes and other non-communicable diseases through provincial and district hospitals as
well as for health and wellness promotion; (c) 20 percent to the Department of Education to
provide public schools and sports facilities access to potable water and health awareness
programs; (d) three percent to the Department of Interior and Local Government under
Planning and Budgeting (GPPB) Priority LGUs; (e) three percent to the Food and Drug
Administration to support the implementation of its mandate to ensure the safety, efficacy or
quality of health products; (f) two percent to the Food and Nutrition Research Institute, and
(g) two percent shall accrue to the Bureau of Internal Revenue for tax administration.
otherwise known as “Tax Reform for Acceleration and Inclusion (TRAIN)” which was
approved by the House of Representatives on May 31, 2017. HB 5636 also imposed the same
excise tax rate of P10 on every liter of sugar-sweetened beverages containing locally
produced sugar, while an excise tax at a rate of P20 per liter is imposed for imported sugar.
According to Malik et al., (2006); Vartanian et al.,( 2007). Vartanian et al. (2007)
found that studies with stronger methods (longitudinal and experimental vs. cross-sectional)
reported larger effects of increased SSB consumption on increased energy intake and weight
gain. Duffey et al. (2010) examined the consumption of four foods (soda, whole milk, pizza,
and hamburger) using 20-year longitudinal data and found a soda tax, without considering
other beverages except whole milk, would significantly decrease energy intake.
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According to French et al., (2001); Jeffrey et al., (1994). Some studies point to
evidence of large price responses in school cafeteria experiments that cut the price of healthy
snacks and raise the price of unhealthy. Results from in-school experiments may not be
comparable in retail food markets because children have unique utility functions partly due to
According to Fletcher et al., (2009 and 2010); Powell et al., (2009); Sturm et al.,
(2010). Cross-sectional studies investigating State-level soda taxes and body weight have
generally small and not displayed on the supermarket shelf, and therefore, consumers may be
unaware and less responsive when making retail purchases. Furthermore, obesity is affected
(2009). Schoreter et al. (2009). The reported demand elasticities have been used to
extrapolate potential effects of a SSB tax utilized elasticities for regular and diet sodas
reported by Dhar et al. (2003) and found that a 10-percent tax on regular soda would reduce
body weight by 0.2 pounds; no other alternative beverages, however, were considered.
There are deficiencies in the reported elasticities for our evaluation. When a particular
beverage is taxed, consumers will respond by reallocating their beverage purchases among
estimates has led researchers to rely solely on the own-price elasticity. This is a major
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limitation for evaluating the impact of a SSB tax on obesity because some juices and milk
Secondly, in order to fully examine beverage-energy intake, SSBs and their low-
(2004); Bergtold et al., (2004), There are studies that differentiate regular and diet sodas but
to our knowledge, there has been no attempt to separate sugar-sweetened sports, energy, or
fruit drinks from their low-calorie counterparts. We specify a demand system to address the
above limitations.
Taxation of Sugar sweetened beverages for reducing their consumption and preventing
health might arise, as a consequence of food taxes, can be informed by economic theory such
as the expectation that consumer behaviour will change in response to price changes and
comparative evidence from other taxes on consumer goods with adverse health effects.
Although appropriate energy intake based on sources like sugar is crucial for the human
beverages prices have reduced sales of SSBs and in turn may have encouraged the purchase
of food lower in energy (e.g. bottled water and non sweetened tea).
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According to Block (2010); Epstein (2012); Wansink (2014); Waterlander (2014;
Yang (2010). These studies are usually conducted in closed or simulated environments like
According to Batis (2016); Beradi (2012); Colchero (2016); Kim (2006). Empirical
evidence is becoming available, based on data from countries or states that have already
implemented sugar sweetened beverages taxes. This includes research on the association
between the existence of statelevel soft drink and other high caloric food taxes, and the
According to Maniadakis (2013) beyond that, supply side changes must be considered
As a result, taxes might not be fully passed on to the consumer and this may limit the
reaction of producers to avoid taxation may lead to lower energy density of SSB products in
general, especially with different tax rates that depend on the sugar content of beverages
(Ecorys 2014).
According to Laviada Molina (2016); Zheng (2015) a change in demand for and
substitution of SSBs by the consumption of more diet soda products could increase the
impact on general health, and by substituting with drinking water could lead to even greater
health benefits for the consumer (e.g. decrease in total energy intake, body weight reduction).
Often, subsidisation of healthy foods (e.g. raw vegetables and fruits) financed by revenue
healthy food and taxation of unhealthy food might not substantially change consumption
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patterns due to no change in total expenditure on food and total energy intake (Maniadakis
2013).
According to Brownell (2009); Fletcher (2010); Sassi (2014) this could cause an
increase in economic inequality. Despite this, people from lower‐income groups are generally
more likely to experience greater health benefits due to their greater health burden and their
higher price sensitivity, leading to lower consumption (Eyles 2012; Maniadakis 2013).
lowering consumption of SSBs, then in relative terms SSB taxes would risk the disposable
income of people with lower income more than the disposable income of people with higher
income. This could lead, in turn, to adverse health effects (i.e. intervention‐generated health
inequalities).
Weight
According to Austin Trujillo (2015), there are three essential themes that must be
reviewed to provide context to the discussion of how a one-cent per ounce tax on sugar-
sweetened drinks may limit overweight and obesity prevalence. The first is understanding
this health issue: how it is measured and what population are affected. The second component
is the understanding of current tax methods for taxing unhealthy foods and drinks: the use of
excise taxes, taxation to deter consumption, and taxation to decrease obesity. The third theme
is the examination of the association between sugar-sweetened drinks and obesity: is the
will examine peer-reviewed academic literature is it relates to these themes. I will identify
gaps in the current literature and discuss how it may affect my study. Based on my findings I
will theorize the effect a one-cent per ounce tax on sugar-sweetened drinks will have on
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overweight and obesity prevalence in California. Overweight and Obese Populations in the
tool to combat weight related health issues in adults and adolescents, it is necessary to
examine measurements and trends as they relate to overweight and obesity prevalence.
The purpose of this section is to review the literature on the association between these
weight is categorized in related research and throughout this thesis. I will then 9 identify
different populations are affected by this health issue at different rates. Definitions and
Measurements Used in Health Research “Overweight” and “obesity” have specific definitions
that are used throughout related literature to categorize an individual’s weight. The World
Health Organization developed the most common definition for obesity; it defines obesity as
a disease wherein body fat is in excess to the point health is impaired. “Overweight" is
defined as weight above what is considered normal for a person based on their height, age
and sex; wherein weight can begin to contribute to health issues (Centers for Disease Control
and Prevention, 2012). The standard unit of measurement in obesity discussions is Body
Mass Index (BMI). BMI is calculated by dividing an individual’s weight, in kilograms, by the
squared sum of the individual height, measured in meters (kg/m2 ). Adults with a BMI over
25 kg/m2 and 30 kg/m2 are considered overweight and obese, respectively. These cut points
are recommended by the National Heart, Lung, and Blood Institute and the North American
Association for the Study of Obesity, Expert Committee to provide a national consensus for
cut points (Wang & Beydoun, 2007). BMI is a correlation, it does not directly measure body
fat, thus it is possible for a healthy person to have an overweight BMI score due to factors
such as an unusually large amount of muscle mass (Centers for Disease Control and
Prevention, 2012).
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The lack of data is discussed in varying capacities with authors citing such issues as
inadequate data for other racial subcategories and variations in how subgroups are defined
(Wang & Beydoun, 2007). Similar to racial and ethnic disparities, the literature fails to
overweight and obesity prevalence. As Babey, Hastert, Wolstein, and Diamant (2010) find an
analyze income as well as other socioeconomic variables such as education and geographic
location to determine if such factor effect overweight and obesity prevalence in California.
CHAPTER III
METHODOLOGY
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This study made use of survey research by distributing questioners to willingly
selected respondents to determine the advantages and disadvantages of excise tax on sugar-
Research Design
This study is all about the advantages and disadvantages of excise tax on sugar-
sweetened beverages. This study made use of questionnaire method to determine the
qualitative type of research is made use because it gives a complete explanation on the
The respondents of the study are the 50 students of San Nicolas National High
School. Random sampling is used to determine the respondents in this study. The researchers
select the respondents who consumes sugar-sweetened beverages. The researchers made a
beverages.
The study was conducted and undertaken at San Nicolas National High School.
Research Instrument
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The questioner method is used in the study. The respondents who were randomly
selected by the researchers were to answer patiently the question in the questionnaire which
CHAPTER IV
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RESULTS AND DISCUSSION
The researcher gathered data about the perception on sugar sweetened beverages. And
in this part, people will assess themselves on what they think or what are their perceptions on
Almost all people think that a sugar sweetened beverages is sometimes quite good but
too much is bad. Some think that if we drink too much, health risks may arise including
obesity, tooth decay, heart disease and diabetes. But minority thinks, it is usually drinks in
Above all, the question, “what is your perception on sugar sweetened beverages?” is
already answered. Despite the fact that there are some reasons such as, if we are thirsty, we
can replace it with water, they contribute a lot of empty calories, which are calories that don’t
contribute any vitamins, any minerals, anything positive to our diet, and lastly it is a tasty
treat that can beneath risk, if you’re not careful. Majority says, sugar sweetened beverages is
sometimes quite good but too much is bad. Therefore the respondents are thinking their
more diet soda products could increase the impact on general health and by substituting with
drinking water could lead to even greater health benefits for the consumer.
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The researchers collected data about the advantages of increasing the price of sugar-
sweetened beverages. And in this part, respondents will assess their selves on what are the
Most of their reasons are people will switch to nutritious product. Some says, the
money I taxes could be used for health related program, it will lessen our expenses and the
government will give a lot of benefits to citizens like giving a scholarships to the students,
road projects and etc. But minority says, it would boost productivity not just health.
Above all, “What are the advantages of increasing the price of sugar-sweetened
beverages?” is already answered. Although there are some reasons like, the taxes could be
used for health related programs, it will lessen our expenses the government will give a lot of
benefits to citizens and it would also boost productivity. Majority says, people will switch to
nutritious products.
more diet soda products could increase the impact on general health and by substituting with
drinking water could lead to even greater health benefits for the consumer.
The researchers collected data about the disadvantages of increasing the price of
sugar-sweetened beverages, in this part they will impose their own selves on what are the bad
Most of the responses of the consumers, there is a possibility that they will not
purchase on sugar sweetened beverages anymore. Some also answered that it will cause this
as an additional financial burden to them. On the other hand, some seller also tells that it can
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decrease the profit on their store because of the price increase, but the least answer of all is, it
can leads the excise tax on sugar- sweetened beverages to job losses.
Therefore, the question “What are the disadvantages of increasing the price of sugar
sweetened beverages?” is already answered. Though, there are answers like, it can decrease
the profit on their company/stores because of the price increase , it can leads also to job losses
and the cause of the increase tax to them is an additional financial burden. The most answers
of the respondents is there are possibility that they will not purchase on sugar sweetened
beverages anymore.
This certainly supports the statement of Arado (2017) that they have to really look
into that in depth and maybe consult with different sectors that are affected because there
might be some things that our lawmakers have not seen in terms of the excise tax probably
CHAPTER V
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CONCLUSIONS AND RECOMMENDATIONS
Conclusions
Findings of this study were compared with the studies that re related about the
provides similar and different results compared to previous literatures and studies.
Above all, this study give the insights to the advantages and disadvantages of excise
tax on sugar-sweetened beverages. Based on the result of this investigative study, the
1. Most of the respondents have the same perception on the excise tax on sugar-
sweetened beverages which is “sometimes it is quite good but too much is bad.” And
some says, “it is usually drinks in bonding time with friends and family.”
anymore. And some says, it can lead the excise tax on sugar-sweetened beverages to
job losses.
will switch to nutritious products and only few of them says, It would boost
Recommendations
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The researchers formulated some recommendation:
1. It is recommended that other beverages that contain too much sugar will be given excise
tax also.
2. It is recommended that drinking sugar-sweetened beverages is quite good but too much is
bad.
3. It is also recommended due to excise tax of sugar-sweetened beverages the consumer will
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CHAPTER VI
REFERENCES
Am J Public Health. October 2016. Impact of the Berkeley Excise Tax on Sugar-
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5024386/
Philippines . http://www.ntrc.gov.ph/images/journal/2017/j20170506a.pdf
data. https://jech.bmj.com/content/early/2018/01/11/jech-2017-209791
(The Philippine Star) - October 16, 2017. Bittersweet culmination: Tax on sugar-
sweetened beverages.
https://www.philstar.com/business/2017/10/16/1749481/bittersweet-culmination-tax-
sugar-sweetened-beverages
https://ageconsearch.umn.edu/bitstream/61167/2/AAEA%20_05122010_.pdf
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Wada Roy. 2014 April. Employment Impact of Sugar-Sweetened Beverage Taxes.
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4025719/
reducing their consumption and preventing obesity or other adverse health outcomes.
https://www.cochranelibrary.com/cdsr/doi/10.1002/14651858.CD012319/full
http://www.choicesmagazine.org/UserFiles/file/cmsarticle_187.pdf
Trujillo Austin. 2015. An excise tax on sugar-sweetened drinks as health policy: can
project/bank/2015/trujillo.pdf
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