House panel forms TWG to harmonize bills on tax rates of alcoholic drinks

The House of Representatives panel on Tuesday approved the creation of a technical working group (TWG) to harmonize the two bills seeking to increase and restructure the excise tax rates on alcoholic beverages.

At the fourth hearing of the ways and means committee, AAMBIS-OWA Rep. Sharon Garin moved for the creation of a TWG to reconcile House Bill (HB) Nos. 8286 and 4839. The panel consequently approved it without objections.

The two bills seek to amend Sections 141, 142 and 143 of Republic Act No. 8424, otherwise known as the National Internal Revenue Code of 1997.

HB 4839, principally-authored by Garin, seeks to increase the tax excise rates on distilled spirits, wines, and fermented liquors. This is on top of the recently-implemented tax rates for tobacco and alcohol products under the “Sin Tax Reform Act” and the Tax Reform for Acceleration and Inclusion law.

It also seeks to retain the 2-tier tax structure level, which Garin said would “level the playing field of stakeholders producing alcohol products through domestic raw materials.”

HB 8286, filed by Sultan Kudarat 2nd District Rep Horacio Suansing Jr., meanwhile proposes an increase in excise tax on alcohol products and the indexation rate to 10 percent to account for income and inflation.

To “further simplify” the tax administration on spirits, the bill also bases the tax on volume per liter instead of “per proof liter.”

Suansing also said the generated incremental revenues would fund social services and infrastructure programs of the government.

During the hearing, representatives from the alcohol industry appealed that lawmakers impose an “equitable tax structure and moderate increase on excise tax,” which they admitted would hurt their businesses.

Olivia Limpe-Aw, who represented both the Distileria Limtuaco Co. and Inc., meanwhile expressed concerns that the tax structure might be “regressive.”

She also said the industry hopes the chamber would not rush on the passage of the measure. /jpv

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