Gov’t eyes higher tax on low-alcohol drinks

The government is looking at further raising the excise taxes slapped on so-called “alcopops” not only to generate additional revenues but also to discourage binge drinking, especially among the youth.

“We are studying whether it should be part of the proposal or if we should maintain the status quo as these products are already being taxed as distilled spirits,” Finance Assistant Secretary Antonio Joselito G. Lambino II told reporters last Friday when asked about the plan to increase the excise taxes on alcopops.

Lambino confirmed that a recent meeting between the departments of Finance (DOF) and of Health discussed the emergence of alcopops in the domestic drinks market.

Alcopops are flavored drinks with lower alcohol content of about 3 to 7 percent, widely available in convenience stores and small retailers.

A report in 2012 quoted an executive of a local firm involved in product distribution as saying that beers, for instance, were already losing market share to alcopops, which have at least 10 brands available in the country at that time.

Lambino said that since alcopops sell well among the youth, making these drinks expensive would help lessen binge drinking.

While Congress already approved higher excise taxes on cigarettes, the plan to raise levies on alcohol products remains pending.

In May, Finance Secretary Carlos G. Dominguez III said that while the Sin Tax Reform Law of 2012 had been effective in reducing smoking incidence in the country, it failed in curbing the drinking vice.

Dominguez had blamed the 2012 law as it “did not raise [alcohol] excise taxes to the level that both fiscal and health authorities deemed ideal.”

“As a result, prevalence of binge drinking among regular consumers continues to rise. The deterrent effect of sin tax on alcohol products has not been achieved,” Dominguez said.

The DOF was pushing for Sen. Manny Pacquiao’s proposal during the 17th Congress to tax alcoholic drinks by at least P40 a liter.

The Lower House-approved increases in alcohol tax rates last year were nonetheless below the DOF’s original proposal.

Alongside higher cigarette taxes, increasing excise taxes on alcohol would fund the implementation of the Universal Health Care Law recently signed by President Duterte.

The government needs about P258 billion next year to implement the universal health care program, and sin taxes were supposedly among its main sources of funding.

However, the government could only raise P195 billion in 2020 without sin tax reform—a funding gap of P62 billion, according to Dominguez.