‘Sin tax’ on alcohol, tobacco lauded, slammed

Senator Pia Cayetano shows one of those so-called alcopops during a Senate hearing. Photo from Office of Sen. Pia Cayetano

MANILA, Philippines — Sen. Pia Cayetano on Wednesday said she was more inclined to support the Department of Finance’s (DOF) proposed measure on higher excise taxes on alcoholic drinks, rather than the bill approved this week by the House of Representatives.

The House on Tuesday approved on third reading a bill imposing a higher “sin tax” on alcohol products and e-cigarettes.

Cayetano said she was supporting the DOF version because it would generate more funds for social services.

“Technically, I haven’t adopted anything yet, but I have an open mind to go towards the version of the DOF because I’m with the administration,”  the chair of the Senate ways and means committee told the Kapihan sa Manila Bay forum.

But Cayetano said she was open to adjusting her stand if she would be presented with information that the DOF position was extreme.

The House version would net additional revenues of P15 billion in the first year, much lower than the DOF’s projected revenue of P33 billion, officials said.

Under House Bill No. 1026, the ad valorem tax imposed on distilled spirits shall be increased from 20 percent to 22 percent.

Specific tax rates per proof liter shall be imposed with P5 increments every year until 2022—from P30 per proof liter in 2019 to P45 in 2022. From 2023 onward, the rate shall be increased by 7 percent annually.

The bill would also  impose a 15-percent ad valorem and a single specific tax of P650 per liter on sparkling wines.

Still wines and carbonated wines containing 14-percent alcohol or less will have a P40 tax, while those with 25-percent alcohol content or less will be taxed P80.

The tax on beer and other fermented liquors shall be raised from P23.50 per liter to P28 per liter starting January. It will be incrementally increased to P32 in 2020, P34 in 2021 and P36 in 2022.

For heated tobacco products, the tax shall be P45 per pack of 20 units or packaging combinations of not more than 20 units, beginning 2020. The specific tax per 20 units of heated tobacco products will rise to P50 in 2021, P55 in 2022 and P60 in 2023.

Also by 2020, vapor products with nicotine salt shall have a P30 tax per milliliter. This will increase to P35 per milliliter in 2021 with P5 increments per year until 2023.

Health Secretary Francisco Duque III and the Sin Tax Coalition, meanwhile, lauded the passage of the bill, saying the higher tax on alcohol products would help reduce alcohol consumption among Filipinos. —WITH A REPORT FROM JOVIC YEE