Excise tax hike on tobacco, alcohol approved on third reading
THE House of Representatives approved on third and final reading Monday, December 3, the bills seeking to increase the excise taxes imposed on tobacco and alcohol products.
The measure, House Bill (HB) 8618, got 189 affirmative votes, while seven lawmakers voted against it during Monday’s plenary session.
HB 8618, authored by Representative Horacio Suansing, Deputy Speaker Sharon Garin, Representatives Marvin Nieto, Estrellita Suansing, Rodel Batocabe, Christopher Co, and House Speaker Gloria Macapagal-arroyo, seeks to address the perceived inequality on the excise tax collections on alcohol products.
Collections from alcohol products account for 30 percent of the excise tax collections, while cigarettes cover 70 percent.
The bill imposes on distilled spirits such as brandy, whisky, and alcopops a tax rate of 22 percent ad valorem on the net retail price (NRP) per proof, plus a specific tax of P30 per liter beginning 2019.
The tax will increase by P5 every year until it reaches P45 per liter in 2022. In 2023 and onwards, the specific tax for distilled spirits shall climb seven percent each year.
The measure also integrates two specific tax rates for sparkling wine into a unitary rate pegged at P650.
This means that beginning 2019, sparkling wines will receive 15 percent ad valorem tax per liter plus P650 specific tax per liter. The specific tax will be raised by seven percent beginning 2020 and every year thereafter.
Cooking wines that contain a salt content of not less than 1.5 grams for every 100 milliliter shall be exempted from excise tax.
Meanwhile, 187 lawmakers voted in the affirmative, seven voted in the negative, and one lawmaker abstained from the voting on House Bill 8677, which seeks to increase the excise taxes imposed on tobacco products.
Under House Bill 8677, each pack of cigarettes shall be taxed P37.50 beginning July 1, 2019 until June 30,
An amount of P2.50 shall be added to the rate after the said year until it reaches P45, meaning cigarettes per pack will be taxed P40 beginning July 2020; P42.50 beginning July 2021; and P45 beginning July 2022.
On July 2023 and every year thereafter, the tax rate shall be raised an additional four percent.
HB 8677 is authored by Representatives Joey Sarte Salceda, Angelina Tan, Ramon Rocamora, Jocelyn Limkaichong, Bellaflor Angara-castillo, Gabriel Bordado, Cheryl Deloso-montalla, Estrellita Suansing, Jose Antonio Sy-alvarado, Anthony Bravo, and Rodel Batocabe.
Both bills, sponsored and defended on the floor by committee on ways and means chairperson Representative Estrellita Suansing, seek to reduce the consumption of alcohol and tobacco and to generate revenue to fund the Universal Health Care program of the governm e n t . / Sunstarphilippines