DOF still hopeful on Congress OK of ‘sin’ tax bill

The Department of Finance (DOF) expects Congress to pass the increase in taxes on alcohol, heated tobacco and vaping products right after it approves the 2020 national budget.

“We’re still on-track with the ‘sin’ taxes. I think yesterday the concern was to get the budget passed today so it can move forward,” Finance Secretary Carlos Dominguez III told reporters on Wednesday.

On Wednesday morning, the bicameral conference panel of the two houses of Congress signed the report on the proposed P4.1-trillion budget for next year.

The spin-off to package “2 plus” of the Duterte administration’s comprehensive tax reform program included higher excise taxes on alcoholic drinks as well as a levy on heated tobacco and vapes similar to the rates to be slapped on cigarettes next year.

In July, President Duterte signed Republic Act No. 11346, under which the excise tax on cigarettes will be jacked up from P35 a pack at present to P45 in 2020, P50 in 2021, P55 in 2022, and P60 in 2023, to be followed by 5-percent annual indexation from 2024 onward.

RA 11346 also slapped new taxes on heated tobacco products and vapes but the DOF had deemed these rates “too low,” hence the updated pending bill.

Incremental revenues from so-called sin taxes will augment funding for the Universal Health Care Program beginning 2020.

The Bureau of Internal Revenue is already preparing for the implementation of a further increase in cigarette and alcohol taxes next year by ensuring that the new tax stamps to be affixed on these products cannot be faked. —BEN O. DE VERA