Sin tax approval eyed before end-2019

THE Department of Finance (DoF) is hopeful the Senate would approve the proposed additional “sin” taxes on liquor, electronic cigarettes and vapor products before the end of the year after the measure was certified as urgent by President Rodrigo Duterte.

“We really would appreciate it if they can pass it before the end of the year,” he told reporters in an interview on Tuesday night.

Dominguez added senators still have three weeks to approve the measures under Senate Bill (SB) 1074 before their Christmas break.

“We hope that we can do it before the year end so that we can implement the law on January 1. Because if it is passed after January 1, it’s very hard to implement the law mid-way in the year,” he said.

The tax measures were filed under SB 1074, which seeks to increase taxes on alcohol products through the following rate adjustments: Distilled spirits will be imposed an ad valorem tax of 20 percent on the net retail price per proof and a specific tax of P90 per proof liter on the first year of implementation, which will be increased by P10 every year until the fourth year. The specific tax rate will increase by 10 percent every year thereafter.

For fermented liquor (beer) and alcopops, SB 1074 seeks a specific tax rate of P45 per liter in the first year of implementation, increasing by P10 every year until the fourth year of implementation. The specific tax rate will increase by 10 percent every year thereafter.

Wine products will be slapped with a specific tax of P600 per liter for sparkling wines and P43 per liter for still and carbonated wines. These rates will increase by 10 percent every year thereafter.

For e- cigarettes under the heat-notburn product category, current rates will increase to P10 per pack of 20 to P45 per pack in the first year of implementation to be at parity with regular cigarettes.

For vapor products, there will be a distinction between salt nicotine and freebase. From P10 per 10 millileter (ml) or less, salt nicotine will increase to P45 per ml, while freebase will increase to P45 per 10 ml on the first year of implementation. These rates will increase by P5 every year until the fourth year of implementation then 5 percent every year thereafter.

These tax rates are expected to raise