Bill simplifying alcohol, tobacco taxes could raise P31-B in revenues

MANILA, Philippines - Manila could raise as much as P31 billion only if the government would approve a bill simplifying “sin" taxes. This was recently announced by Department of Finance (DOF) officials who estimated that a draft law filed by Quezon Representative Danilo E. Suarez would boost revenues by P12.9 billion this year and P18.6 next year. Additional funds collected from this legislative proposal—which includes a proposal charging higher rates on alcohol products—are expected to help government in bankrolling infrastructure programs designed to stimulate the economy. Besides amending House Bill no. 3759—also known as an Act Restructuring the Excise Tax on Cigarettes Packed by Machine—which intends to levy a uniform excise tax of P14 per pack, Suarez’s proposal also seeks to alter House Bill 3787, an Act Restructuring the Excise Tax on Alcohol Products. If approved, HB 3787 will impose a single tax rate on liquor. Suarez’s proposed legislation seeks to raise P34 billion from the unified tobacco tax rate and P17.4 billion under the revised tax scheme for alcohol products. However, finance officials admitted that the law, if passed, may result in lower revenues since higher taxes may curb demand for liquor and tobacco. Certain brands enjoy preferential treatment under the Philippines’ current multi-tier excise rate system, industry players claim since lower-priced products are taxed less compared to premium brands. Implemented since 1997, this arrangement has reportedly discouraged the entry of other tobacco companies. - GMANews.TV