Bottled water tax


In 2018, the government imposed an excise tax on sweetened beverages. The State’s aim was to curb the consumption of sweetened beverages as a way of fighting diabetes and obesity. As of 2019, the tax rate was P6 per liter for nonalcoholic beverages using purely caloric sweeteners like sugar. The tax is P12 per liter for beverages sweetened with high fructose corn syrup.

The tax covered sweetened juice drinks and tea; all carbonated beverages; 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. Tax exempt were beverages sweetened with purely coconut sap sugar and purely steviol glycosides (stevia leaves extract); all milk products; 100% natural fruit and vegetable juices that do not have added sugar or caloric sweetener; meal replacement and medically indicated beverages; and ground instant and prepackaged powdered coffees.

While the tax was being considered in Congress, I opposed it for the simple reason that any tax on food and beverage will also raise the cost of food, and make them even less accessible particularly to the poor. I also argued that the government could tax everything else but food and beverage. Moreover, food and beverage consumption is already subject to 12% value-added tax.

To compensate for their “harm” to society, or the negative externality they cause, goods like cigarettes, alcoholic beverages, and sweetened beverages are imposed an excise tax. For these goods, the “harm” is related to public health. The tax makes up for public health costs related to treating lung cancer, emphysema, liver cancer, cirrhosis, obesity, diabetes, and cardiovascular disease, among others.

In the case of goods such as motor vehicles, which are also imposed an excise tax, the negative externalities involve mainly pollution, both noise and air. And their emissions contribute significantly to climate change. The consumption of oil, coal, and natural gas also has negative externalities related to pollution. But while oil and coal are subject to excise tax, at present, natural gas is exempt. It goes without saying that pollution can also result in harm related to public health.

Obviously, the use of plastic bottles for packaging drinking water also has negative externalities. Their improper disposal leads to widespread land and water pollution. On the production side, plastic bottle manufacture also has emissions. And based on recent reports, it seems that bottled water consumption also has health implications: the consumption of “nanoplastics.”

In a recent column, I cited a new US study that validated previous research that every time people drink water from a plastic bottle, they are also drinking very small bits of plastic along with it. The new research indicates that the number of nanoplastics in every liter of bottled water could go as high as 370,000 particles if not more.

After the tax on sweetened beverages maybe the government can now consider a similar tax on bottled water. The argument against this is that bottled water is a necessary food, and more essential than a sweetened beverage. And such a tax will make bottled water more expensive, and thus limit public access to clean, safe, drinking water.

Perhaps this argument would be more persuasive if people did not have alternatives to plastic bottled water. But just like in the case of sweetened beverages, people have plenty of other options, water included. One can choose to drink water from the tap; buy filtered water in bulk; filter tap water at home; carry along house water in a reusable container, etc. In short, while water is essential, consuming it from a plastic bottle is not.

The issue, previously, was not the water but the plastic bottle. But now, the issue seems to cover the water as well. After being bottled in plastic, microscopic plastic particles reportedly end up in the water, and thus in people’s bodies. As early as five years ago, in 2018, scientists were already warning that people were also drinking nanoplastic when they drank water from plastic bottles.

As I noted in a previous column, I view nanoplastics in bottled water like carcinogens in cigarettes and processed foods that can cause cancer. And while there may not be enough studies out there to indicate harm, common sense dictates that even the most minute plastic particles have no place in the human body.

As such, perhaps in addition to a tax, plastic bottled water should also carry public health messages regarding the risk of consuming thousands of small plastic particles in every liter. While the public health impact of such consumption remains largely unstudied, the public should still be made aware of this fact, which is based on published research.

Although a spokesperson for the International Bottled Water Association has been reported as telling CNN that “there currently is both a lack of standardized methods and no scientific consensus on the potential health impacts of nano- and microplastic particles. Therefore, media reports about these particles in drinking water do nothing more than unnecessarily scare consumers.”

The safety of bottled water consumption will continue to be debated for some time. The same goes for whether water in plastic bottles should also be taxed like sweetened beverages. My counter to this is that the idea is to tax not the water but the plastic bottle. In this line, global practice should not be the basis but practical local application.

One possible guide is a recent study commissioned by Brita of UK, which found that “more than half (54%) of all bottled water in the UK is consumed either at home or at work, meaning it could be easily replaced by solutions such as water filters.” And this proves the point that while water is essential and necessary, drinking it from a plastic bottle is not. A similar study can be done here.

To my mind, the process starts with making a clear scientific data-based determination whether drinking water in plastic bottles is an essential or “necessary” food in the Philippines. The parameters for this can be set by scientists and experts. And based on this gauge, then Congress can consider whether water in plastic bottles should be taxed or should carry health and environment impact labels.

Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippine Press Council