The Department of Finance (DOF) wants to ban the online retail of liquor and cigarettes, also referred to as “sin” products, to avoid such items falling in the hands of minors. With restricted movement and limited access to goods and services, online marketplaces have become the main avenue for trade and commerce. Aside from this incoming ban, senators are also eyeing the taxation of “junk food” to fund COVID-19 relief efforts. For small businesses that highly depend on these products, these will eat into what little margins they have left.

E-commerce platforms usually ask the buyer for confirmation that they are at least 18 years old before they are given access to the specific product page selling liquor or cigarettes. PMFTC Inc. communications director Dave Gomez says that retailers should be responsible for double-checking the ages of buyers upon delivery, even asking for any government-issued ID as proof of legality. 

Aside from these “sin products,” the government is also looking at junk foods as another possible sin tax. According to Sen. Sherwin Gatchalian, vice-chair of the Senate committee on economic affairs, junk foods have zero nutritional value and have been proven to be a major cause of obesity and other heart ailments. In February, the DOF reported a revenue total of P269.1 billion from products such as tobacco, alcohol and other sweetened beverages in 2019. This year, around P332.3 billion is expected to be made from sin taxes, following an increase in alcohol and tobacco (including e-cigarettes) excise taxes.

Although it can be tempting to look at “low-hanging fruits” such as sin products and junk food as sources of new tax, there must be careful consideration of entrepreneurs, particularly those managing small businesses, as they will bear the brunt of increased taxes and product limitations in online markets.

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