Bill raising tobacco, alcohol taxes reaches Senate floor

MANILA, Philippines — A bill raising the taxes on alcohol and tobacco products has reached the Senate floor.

As chair of the Senate committee on ways and means, Senator Pia Cayetano on Wednesday endorsed for plenary approval Senate Bill No. 1074, which was contained in Committee Report No. 6.

The committee report was signed by 17 senators.

For distilled spirits, the bill proposes the imposition of an ad valorem tax of 20% and a specific tax of P90 per proof liter on the first year (2020), and additional P10 every year until the fourth year (2023).

“The reason for this is as follows: Distilled spirits often have a high alcohol content, which is why the specific tax rate is based on proof liter,” Cayetano said.

“From a health standpoint, a bottle with a higher alcohol content will be taxed higher than those with a lower alcohol content.”

The ad valorem tax, meanwhile, addresses the range of price points among distilled liquor, the senator sad.

“Since this is based on the products’ prices, the cheapest brand will be taxed lower than the most expensive brand,” she pointed out.

For fermented liquor (beer) and alcopops, the measure seeks a specific tax rate of P45 per liter on the first year, which would increase by P10 every year until the fourth year.

The specific tax rate will increase by 10% every year thereafter, Cayetano said, explaining the bill.

For wine products, Cayetano said there will be a specific tax of P600 per liter for sparkling wines and P43 per liter for still and carbonated wines. These rates, she said, will increase by 10% every year thereafter.

The bill, meanwhile, seeks to impose a tax of P45 per pack of 20 units by Jan. 1, 2020. The tax will increase by P5 every year thereafter until 2023. The tax will further increase by 5 percent every year starting Jan. 1, 2024.

For vapor products, the tax of P45 will be imposed per milliliter or a fraction by Jan. 1, 2020, to increase by P5 very year until 2023. Tax will also increase by 5 percent every year starting January 1, 2024.

An additional tax would also be imposed on conventional “freebase” or “classic nicotine.”

Starting January 1 next year, the tax for classic nicotine would be P45 per 10 milliliters or a fraction thereof; P50 by Jan. 1, 2021; P55 by January 1, 2022; and P60 by 2023. The tax rate will increase by 5 percent every year starting Jan. 1, 2024. /je