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Beer prices to rise by nearly half with approval of tax bill


MANILA, Philippines - Unifying tax rates for alcohol and tobacco products will increase beer prices by nearly half, cutting demand and forcing local brewers to shutter their plants. Prices of beer will rise by an unprecedented 41 percent, forcing brewers to halt operations, Asia Brewery Inc. chief financial officer Jose Gabriel Olives said during a hearing at the House Ways and Means Committee. The Department of Finance’s (DOF) proposed excise tax increase – as contained in a proposed law pending in Congress – will not only compromise the industry’s survival but also the welfare of its employees, Olives told legislators. He made these remarks during the hearing which discussed among others, House Bill 3787. Besides planning to unify the tax rate under a single scheme, the proposed law, once approved, will raise specific taxes on locally-made beer products by an average of 123 percent, Olives said. “Imported beer brands…are proposed to increase by only 13 percent," Olives said. “The wholesale price of our economy-priced beers will have to increase by at least 41 percent in order to accommodate the new taxes – an amount we are certain the market cannot bear," Olives said during the hearing. Legislators should keep the current excise tax schedule which in turn will help preserve jobs provided by the industry, the Asia Brewery executive urged. He added that the beer manufacturing sector “firmly opposes any tax increase during these critical economic times and especially in the form and magnitude that the bill proposes." “This proposed tax bill is the opposite of what other countries are implementing. And, as mentioned before, it will have the most negative effects on the sector which will suffer the most economic dislocation from the current crisis," Olives added. The DOF is currently looking for various ways to plug an P85 billion deficit in this year’s recently adjusted revenue program. Earlier, DOF Secretary Margarito B. Teves said that the government expects to collect some P1.238 trillion in taxes this year. It was cut to P1.153 trillion as the country’s economic team – of which Teves is a member – agreed to increase this year’s deficit to P177.2 billion instead of only P102 billion. - GMANews.TV
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