House OKs bills seeking to raise alcohol, tobacco excise taxes

The House of Representatives on Monday approved on third and final reading two bills seeking to raise excise taxes on alcohol and tobacco products.

During its plenary session, the chamber approved with a vote of 189-7-0 House Bill 8618, which aims to increase the excise tax on alcohol products.

The chamber likewise approved House Bill 8677, seeking to raise the excise tax on tobacco products, with a vote of 187-7-1.

Both bills eventually aim to reduce consumption of the two "sin" products while generating revenue for the government to fund its universal health care program.

Under House 8618, distilled spirits such as brandy, whisky and alcopops will be levied a 22-percent ad valorem tax rate on the net retail price per proof, plus a specific tax of P30 per liter beginning 2019.

A P5-increase in the specific tax will then be imposed every year thereafter until it reaches P45 per liter in 2022. Starting 2023, the specific tax for distilled spirits will climb by seven percent each year.

The bill also integrates two specific tax rates for sparkling wine into a unitary rate pegged at P650.

This means that starting 2019, a 15-percent ad valorem tax per liter will be imposed on sparkling wines, plus P650 specific tax per liter. The specific tax will be raised by seven percent beginning 2020 and every year thereafter.

Moreover, the bill removes the "fortified wines" category and integrates it with still wines and carbonated wines with 14 percent alcohol and up.

This category will be taxed at P80 per liter in 2019 which will increase 7 percent every year beginning 2020.

Meanwhile, still wines and carbonated wines with 14 percent alcohol or less will be taxed P40 per liter beginning 2019. In 2020 and every year thereafter, this tax rate will increase by 7 percent.

Cooking wines with salt content of not less than 1.5 grams for every 100 milliliter will be exempted from excise tax under the bill.

On the other hand, fermented liquors, regardless of brewery, will be taxed P28 per liter volume of capacity in 2019, P32 in 2020, P34 in 2021, and P36 in 2022, and this will be raised by seven percent every year thereafter.

Meanwhile, under House Bill 8677, the excise tax on cigarettes will be increased to P37.50 per pack in July 2019, and will be raised by P2.50 yearly thereafter.

This means that by 2020, excise tax on tobacco products would be P40 per pack, P42.50 per pack by 2021, and P45 per pack by 2022.

It will then be increased by 4 percent every year thereafter that starting July 2023. — BM, GMA News