FDA CONFIRMATION FOR PRODUCT CLASSIFICATION OF SB PRODUCTS
Background to TRAIN Law
The Tax Reform for Acceleration and Inclusion Act, or commonly known as TRAIN Law, was implemented in 2017 to enhance tax system in the Philippines, encourage sustainable and economic growth, provide relief to most of the taxpayers and their families, and ensure that the government has enough to provide the needs of all its people. Under this tax reform, income tax for the employed and self-employed was lowered. However, this was offset by an increase in taxes for goods that are not considered as basic needs like vices, sweetened beverages, cosmetics, fuel, and others.
FDA Confirmation for TRAIN Tax Exemption on Sweetened Beverages (SBs)
The Philippines being a tropical country means that many Filipinos consume cold sweetened beverages. Sweetened Beverages (SBs) refer to non-alcoholic beverages in liquid, powder, and concentrate form, that are pre-packaged and sealed according to Food and Drugs Administration (FDA) standards which contains caloric and non-caloric sweeteners. With the TRAIN Law stating an additional tax for sweetened beverages, manufacturers, distributors, and traders, also known collectively as ‘beverage companies’, became eager to apply for a tax exemption on their products. In response, the FDA has issued a circular detailing a standard procedure for beverage companies to request FDA confirmation for the product classification and the type of sweetener used on their products. This confirmation will be used by the Bureau of Internal Revenue (BIR), the Filipino tax authority, to administer the TRAIN tax exemption on SBs. This took effect starting February 01, 2021 onwards.
FDA Confirmation Requirements
To request for the FDA confirmation, the requester will have to submit the following documents:
- Letter of Request with Certificate of Product Registration (CPR)
- Certificate of Analysis with complete information on its content of sweetener(s),
- An approved label with complete ingredients.
They must be emailed to firstname.lastname@example.org with the subject title ‘CFRR-SB Confirmation’ using the requester’s official company email account. Once a response has been received, the requester must attach the FDA’s response together with the application to BIR for the TRAIN tax exemption on SBs.
FDA Philippines. (2021). FDA Circular No. 2021-005 Implementing Guidelines for Requesting FDA Confirmation of Product Classification and Type of Sweetener/s Used for SB Products.