MANILA, Philippines – The prices of alcoholic beverages may eventually increase after the House of Representatives approved on 2nd reading a bill seeking to increase excise taxes on these products.
Lawmakers approved House Bill (HB) No. 8618 on 2nd reading with a vote of ayes and nays on Monday, November 26, just 5 days after the committee on ways and means passed it.
The proposed tax increases are targeted to “significantly curb” alcohol consumption and raise funds for the Universal Health Care (UHC) program.
The Department of Health earlier said about P257 billion is needed for the first year of implementation of the UHC law.
It is still a long road ahead for this tax bill to become a law, however. It has to be passed on 3rd and final reading by the House and must successfully go through another 3 readings at the Senate before Preisdent Rodrigo Duterte can sign it into law.
If passed, HB 8618 would increase excise taxes for distilled spirits like gin, rum, and vodka. The proposed increases are as follows:
- Starting January 2019, 22% ad valorem tax on the net retail price of the alcohol product (excluding excise and value-added taxes) plus a specific tax of P30 per proof liter.
- In addition to the 22% ad valorem tax, specific tax per proof liter will increase to P35 in 2020, P40 in 2021, and P45 in 2022.
- From 2023 onwards, on top of the ad valorem tax, the specific tax will be increased by 7%.
- For sparkling wines, the bill proposes an ad valorem tax of 15% of the net retail price (excluding excise and value-added taxes) per liter and a specific tax of P650 per liter. The specific tax will increase by 7% in 2020 onwards.
For still and carbonated wines with 14% alcohol or less, it will be P40 per liter, to be increased by 7% starting 2020. For still and carbonated wines with more than 14% alcohol, taxes will also increase by 7% on top of P80 per liter from 2020 onwards.
The tax on fermented liquors will be P28 per liter in 2019, P32 per liter in 2020, P34 per liter in 2021, and P36 per liter in 2022. After this, a 7% increase will be observed 2023 onwards.
The bill also seeks to increase the adjustment of alcohol taxes due to inflation from 4% to 7%.
HB 8618 would amend the National Internal Revenue Code of 1997 and Republic Act No. 10351, which restructured the excise taxes on alcohol and tobacco in 2012. – Rappler.com
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