Beyond the ₱20 Sugar Tax: Mon Abrea Calls for Smarter Reform to Protect Health and Consumers

MANILA, Philippines —  As lawmakers evaluate a proposed ₱20 per liter sugar tax on sweetened beverages, tax advocacy and advisory firm Asian Consulting Group (ACG) is urging policymakers to rethink the structure of the tax and prioritize measurable health outcomes, product reformulation and improved tax collection efficiency. 

Health-Driven Taxation: Shifting from Volume to Sugar Content

The current proposal imposes a flat tax based on beverage volume rather than actual sugar content. ACG points out that volume-based taxation treats all beverages equally regardless of their health impact.

Taxing beverages based on grams of sugar per liter provides manufacturers with a direct financial incentive to lower sugar content across their product lines. A sugar content-based framework aligns tax rates with health risks, penalizing high-sugar beverages while rewarding low-sugar or reformulate alternatives. Policy success should be measured by reductions in lifestyle-related health risks and sugar consumption, not simply by the total revenue collected by fiscal authorities.

"A health tax should be judged by its impact on health, not just by how much it collects." said Raymond "Mon" Abrea, CEO and Chief Tax Advisor of Asian Consulting Group. "The goal is not to exempt the beverage industry from taxation, but to align the tax burden with the health risk the policy seeks to address."

Protecting Filipino Purchasing Power: Raising the Tax-Exempt Threshold

Beyond sugar tax design, ACG underscores the urgent need to cushion household finances against rising living costs. While the Tax Reform for Acceleration and Inclusion (TRAIN) Law established a ₱250,000 personal income tax exemption threshold, inflation has steadily eroded the real value of working Filipinos' earnings. Moving the tax-exempt threshold further—from ₱250,000 to ₱400,000—would directly boost the take-home pay of everyday workers. Allowing taxpayers to keep more of what they earn ensures that households can better handle healthcare costs, food inflation, and basic living expenses.

Fiscal Responsibility: "Collect Better Before Taxing More"

The Department of Finance and Bureau of the Treasury data highlights that the country's tax effort hovered around 14.1 percent of GDP in 2023 to 14.55 percent in 2025. Furthermore, the Philippines' Value-Added Tax (VAT) collection efficiency stands at approximately 40 percent, noticeably below the Southeast Asian regional average of 57 percent.

Addressing revenue needs should focus first on plugging tax administration leaks and curbing tax evasion by prioritizing digital transformation, real-time electronic invoicing, cross-agency data sharing, and risk-based audits can significantly improve collections. This will in turn close enforcement gaps to ensure that non-compliant entities pay their fair share, preventing unnecessary tax increases on law-abiding taxpayers.

"Before asking consumers and workers to pay more, the government should maximize the collection of taxes already legally due." Abrea added. "The goal should not be to tax more, but to make every tax work harder for public health, household welfare and the economy."

About ACGlobal

Asian Consulting Group (ACGlobal) is a Philippine-headquartered international tax advisory and investment consulting firm supporting multinational companies, foreign investors, and global brands through tax strategy, investment advisory, market entry, and cross-border expansion.

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Asian Consulting Group works with businesses, industry associations, and stakeholders to navigate tax policy developments, assess regulatory implications, and develop practical strategies that promote tax efficiency, business competitiveness, and sustainable economic growth.

For inquiries, policy discussions, or advisory engagements, connect with our team:

Email: consult@acg.ph

Website: www.acg.ph

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Will a P20 sugar tax make Filipinos healthier?