Winemakers decry ‘excessive’ proposed tax hike
MANILA, Philippines — Wine companies expressed opposition to the proposed tax hike on alcohol products, saying it was “excessive” that it would eventually kill the local industry.
In the Senate ways and means committee hearing, president of Calabria Company Limited Christopher Quimbo pointed out that the House of Representatives’ version of the bill is somewhat unreasonable.
He said that his company, which sells the wine brand Novellino, currently pays P37.9 per liter and in the House version, the tax on wine products is increased to up to P97.5 per liter.
Quimbo said that with the proposal, the government is poised to collect three times the income the company earns.
“The solution here is to increase our price, but if we increase our price to substantially to recover the tax increase, we’ll cease to exist,” Quimbo said.
“Because we don’t make wines for the richest Filipinos, we make wines for the masses and our products are price-sensitive,” he added.
He further noted that his company paid P72.5 million in taxes in 2018, which is already 90 percent of what the government has collected for wine.
“If you triple that taxation, it’s pretty much looks like that it is penalizing a company that is tax-compliant and Filipino… You’re actually penalizing a company that was born in this country, that is local, that is made for the Filipino people,” he said.
For his part, Pablo Garcia Morera of the Espa-Fil Import and Export Corporation said the wine industry covers only over one percent of the market share in the Philippines.
He said the proposed tax hike “seems quite excessive” to impose on the small category in the wine industry.
“All of this seems very unsustainable which might kill the market itself, it actually prevents the market from growing, for other people to actually try,” Morera said.
Finance Undersecretary Karl Chua said the House passed a “slightly more complicated” tax system on alcohol products. However, he said that the Department of Finance (DOF) is open to a simpler system and to increase the indexation of taxes from four percent to 10 percent.
“We are open to keeping our simpler system if that will be okay with the wine industry,” the DOF official said.
The government is pushing for higher taxes on alcohol products to fund the implementation of the universal health care law. /jpv
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