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House postpones decision on simplified 'sin' tax scheme


MANILA, Philippines - A House panel deferred a decision over a simplified taxation scheme for alcohol and tobacco, a measure expected to earn more government revenues. The House Committee on Ways and Means is expected to hold one more hearing next week before it votes on the measure, despite the Department of Finance's (DOF) renewed appeal for its passage. Besides intending to cut the current four-tier taxation system for so-called “sin" products to one or two tiers, the proposal will also earn more revenues for the government, the DOF said. Expected to attend next week's hearing are farmer-representatives from the tobacco-producing northern regions of the country, tobacco and alcohol companies, the Department of Agriculture, Department of Health, and the National Tobacco Administration. Last week, Finance Secretary Margarito Teves urged House leaders anew to pass measures imposing "sin" taxes to generate more much-needed revenues for the government. The Finance department backs a uniform tax rate for all tobacco and alcohol products, but Teves said he would also welcome a two-tier system just to enable the government to collect the revenues as soon as possible. In a statement, the Department of Trade and Industry (DTI) likewise expressed support for a uniform taxation rate on alcohol and tobacco products. "Tax rates applied to domestic applied to domestic and imported alcohol products should be uniform," said the DTI's May 11 statement which was read during the hearing earlier in the day. “Since imported alcohol products are more expensive on a per liter basis than domestic alcohol products, then the tax incidence on the former will naturally be higher, but the tax rate will remain uniform and non-discriminatory," it added. "For tobacco products, the same tax structure will be applied." - GMANews.TV
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