In The Know: Sin Tax Law

Republic Act No. 9334, or the Sin Tax Law, came into force in January 2005. The law mandates an increase in the excise tax rate on all brands of cigarettes and alcohol products every two years. It specifies varying rates of increases until 2011.

Alcohol products are taxed based on the raw materials used to make the product, the net retail price per bottle of the product, and proof (volume of alcohol in alcohol-water mixture) of the beverage.

Cigarettes are taxed based on the brand’s retail price. Effective January 2011, low-priced cigarettes are taxed P2.72 per pack; medium-priced, P7.56 per pack; high-priced, P12 per pack; and premium, P28.30 per pack.

In January 2011, the government said it expected additional revenues of P7.6 billion from the last mandated increases in the excise taxes on alcohol and tobacco.

The restructuring of the sin taxes was one of 13 measures that President Aquino presented to congressional leaders as his administration’s priority pieces of legislation last year.

In August, Malacañang announced that it aimed to generate P60 billion from a proposed bill restructuring the excise tax on alcohol and tobacco products.

Mr. Aquino said the revenues from the modified excise tax would be earmarked for universal healthcare. He added that its ultimate goal was to reduce the consumption of alcohol and tobacco. Inquirer Research

Sources: Republic Act No. 9334, Inquirer Archives