Alcohol tax hike to earn P32B, fund universal health care – DOF

MANILA, Philippines – Raising the excise tax on alcoholic products could generate P32.3 billion in 2019 and help fund the proposed universal health care program, an official of the Department of Finance (DOF) said Wednesday.

In a Senate hearing, Finance Undersecretary Karl Kendrick Chua projected revenues from increased alcohol tax as P32.3 billion in 2019, P40 billion in 2020, P47.4 billion in 2021, P54.6 billion in 2022, and P62.4 billion in 2023, which makes a total of P236 billion in five years.

The funds would help close the P40-billion gap in the funding universal health care, Chua said.

Under the DOF’s proposal made jointly with the Department of Health, distilled spirits would be levied 25 percent ad valorem (value added) tax per proof with a specific tax of P40 per proof liter.

Senator Manny Pacquiao filed a bill in the Senate that would impose a 25-percent tax rate on the retail price per proof liter of distilled spirits and an ad valorem tax of P40 per liter.

The specific tax will go up by P5 yearly until it reaches P55 per liter in 2022. After this period, the specific tax will be raised 10 percent annually.

The proposed policy also increases the taxes imposed on various kinds of wines, as well as fermented liquors.

Last December, the House of Representatives passed on third and final reading a measure that seeks to raise excise taxes on alcohol products.

House Bill No. 8168 seeks to impose a 22-percent tax rate on retail price per proof of distilled spirits, such as brand and whisky, as well as a specific tax of P30 per liter.

Health Undersecretary Rolando Domingo said that aside from generating revenue, increasing alcohol tax was the “most effective way to discourage consumption and reduce accessibility of alcohol products” among the youth and the poor. /cbb