Restructuring sin taxes ‘unrealistic’ – liquor group

The Distilled Spirits Association of the Philippines, Inc. (DSAP) is opposing a bill filed in the Lower House, that will restructure the four-tiered increase in the excise taxes on tobacco and liquor products or ‘sin taxes’ into a single increase.   The group tagged the bill as “unrealistic.”    “[The] DoF’s (Department of Finance) plan to collect more than P62 billion revenues through Rep. (Emilio) Abaya’s bill is unrealistic as it will give relief to imported brands while taxing out of the market local products from which the agency intends to mainly collect,” DSAP president Olivia Limpe-Aw said in a statement.   Cavite Representative Abaya last month filed House Bill No. 5727, seeking to restructure the excise taxes on alcohol and tobacco products. The bill was referred to the House ways and means committee, which conducted its first hearing on HB 5727 Wednesday.   The Finance Department supports the Abaya bill, noting that government could collect an additional P62 billion in taxes equivalent to 1.3 percent of the gross domestic product.   “By the third year, the measure will slap local distilled spirits with an excise tax of P150 per proof liter or more than 10 times the current P14.68. On the other hand, imported premium brands will be gifted with a tax break and only need to pay P42.00 per proof liter or more than 15 times less than the current P634.90,” Limpe-Aw noted.   GMA News Online tried to get in touch with Abaya, but he was at the Senate impeachment trial of Supreme Court Chief Justice Renato C. Corona as of this posting.    “DSAP is ready to help government raise revenues but it should not be in a manner that would force their members to close shop,” according to the DSAP president.   On Tuesday, Philip Morris Fortune Tobacco Corp. also opposed the Abaya bill, citing that an increase in sin taxes may result in higher incidence of “illicit trading.” — Rouchelle Dingalasan/VS, GMA News