Liquor firms ask gov’t to recall ‘sin’ tax plan

Liquor companies in the Philippines are calling on the government to reconsider its plan to collect more revenues from sin taxes, saying this would lead to a huge drop in sales of local alcoholic drinks.

The Distilled Spirits Association of the Philippines Inc. (DSAP) said the Department of Finance’s plan is unrealistic and would only provide relief to imported brands.

“The Finance department’s plan to collect more than P62 billion relief to imported brands while taxing out of the local market from which the agency intends to mainly collect,” said DSAP president Olivia Limpe-aw.

She claimed that if House Bill 5727 is passed into law, it would penalize local brands with an increase in taxes of more than 1,000 percent.

On the other hand, she said imported brands would enjoy an increase of more than 1,500 percent.

“By the third year, the measure will slap local distilled spirits with an excise tax of P150 per proof liter or more than 10 times the current price of P14.68 per liter. On the other hand, imported premium brands will be gifted with a tax break and only need to pay P42 per proof liter or more than 15 times lesser than the current P634.90 per liter,” Limpe-aw said.

She said the law would favor imported products and affect the entire local economy.

Limpe-aw said that even the World Trade Organization (WTO), the international body does not support a regressive tax regime.

However, she said that DSAP is ready to help government raise revenues but should not be in a manner that would force local players to close their businesses.

The House of Representatives Ways and Means committee is currently deliberation on pending sin tax measures including the Finance department-backed House Bill 5727, authored by Cavite Rep. Joseph Emilio Abaya.

The measure calls for the adoption of a unitary tax system for tobacco and liquor and the indexation of taxes to inflation.