Duterte goaded to scratch sin tax bill line mandating court-OKd raids

The Department of Finance (DOF) wants President Duterte to veto the provision in the Congress-approved sin tax bill mandating prior court order before initiating raids versus suspected unscrupulous traders of e-cigarettes and alcoholic drinks.

Finance Secretary Carlos Dominguez III told reporters on Friday the bill that would further raise this year the excise rates on alcohol, heated tobacco and vaping products was still awaiting the President’s signature. If unsigned, the measure will lapse into law on Jan. 24.

“But I want him (Mr. Duterte) to take out one line there. There’s a line saying we cannot raid before the court order. Hindi puwede ‘yun (That’s impossible). You cannot check without the court order? I said, ‘Hindi puwede ‘yun,’” Dominguez said.Dominguez said he already sent to the Office of the President a memorandum containing the DOF’s concern right after the two houses of Congress passed the bill before their Christmas break last year.

Since it was a tax measure, the President can veto that line, Dominguez noted.

“We cannot investigate without court order, puwede ba ‘yun (Is that even right)? Let’s say if their inventory was wrong? Hindi puwede ‘yun,” he added.

Dominguez said that “short” line was inserted in the House version of the bill.

Under current laws, investigation or raids before the issuance of a court order were legal. “That’s allowed by the law, why will you remove that?” the finance chief said.

“That’s how we catch these [unscrupulous] guys. Hindi puwede ‘yun. This one will only apply to alcohol and e-cigarettes,” he pointed out.

In December, the House of Representatives and Senate passed the bill that would impose P25 per pack on heated tobacco products starting 2020, and a higher P45 per 10 mL for conventional freebase vapor products and P37 per mL in the case of salt nicotine vapes.

The bill will also prohibit sel­ling heated tobacco and vaping products to those aged 21 and below.Also in the Congress-approved bill is a new specific tax of P35 per liter to be slapped on fermented liquors such as beer, while sparkling and still wines will be taxed a higher P50 a liter.

Both alcopops, or the flavored alcoholic drinks, and distilled spirits (including brandy, gin, rum, vodka and whiskey) will be levied a 22-percent ad valorem tax, on top of specific tax worth P42 per proof liter this year.Based on DOF estimates, the Congress-approved sin tax bill would raise P22.2 billion when implemented in 2020, lower than the agency’s original proposal to rake in P36.5 billion in revenues during the first year of implementation.

In the next five years, these higher sin taxes would generate a total of P137.2 billion in additional revenues. —BEN O. DE VERA INQ