House approves sin tax reform bill

In this file photo, a vendor sells cigarettes and liquor at a supermarket in Quezon City. The approved bill restructuring the excise tax on tobacco and alcohol products is seen to generate some P60 billion, according to President Benigno Aquino III, who pushed for the passing of the said bill. AFP PHOTO/JAY DIRECTO

MANILA, Philippines—The sin tax reform measure, which will restructure taxes on cigarettes and liquor, has been approved by lawmakers Wednesday.

Authored by Cavite Representative Joseph Emilio Abaya and one of Malacañang’s priority measures, House Bill 5727 earned 46 votes during a hearing of the House Committee on Ways and Means.

They won over the 14 lawmakers who opposed the said bill that seeks to replace the four-tier system on cigarettes and alcohol with a unitary system.

It mandates that distilled spirits and fermented liquor are to have three tiers while cigarettes will have two tiers. Indexation has been pegged at eight percent for every two years.

The Department of Finance pegged additional revenues of the said measure to be up to P33 billion, lower than the P60 million that Malacañang was hoping it would achieve.

The said revenues are being eyed to support the government’s universal health care program.

Malacañang has earlier expressed hope that the sin tax reform bill would be passed within the year for it to be devoid of politics related to the 2013 midterm elections.