House OKs bill raising taxes for alcohol, vaping products on 2nd reading

The House of Representatives on Wednesday approved on second reading the measure seeking to increase taxes on alcohol, tobacco and vaping products.

This came a day after the bill raising taxes for liquors was endorsed to the plenary by the Committee on Ways and Means.

During its session, the chamber approved through a vote of ayes and nays House Bill 1026 filed by committee chair Albay Representative Joey Salceda.

House Bill 1026 originally contained provisions only for alcohol products, but during the deliberation in plenary, it was amended by substitution which now included provisions for tobacco and vaping products.

The bill primarily aims to reduce consumption of alcohol and tobacco products while generating revenue for the government to fund the universal health care program of the government.

Under the measure, distilled spirits such as brandy, rum, whisky and gin will be imposed a 22% ad valorem tax rate on the the net retail price per proof plus a specific tax of P35 per liter beginning January 1, 2020.

A P5-increase in the specific tax will then be imposed every year thereafter until it reaches P45 per liter in 2022. In 2023 and onwards, the specific tax for distilled spirits will climb 7% each year.

The bill also integrates two specific tax rates for sparkling wine into a unitary rate pegged at P696.

This means that 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 7% the years thereafter beginning 2021.

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 P60 per liter which will increase 7% in the years thereafter beginning 2021.

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.

House Bill 1026 also contains provisions imposing higher taxes on tobacco, nicotine and vaping products.

Heated tobacco products, for one, will be taxed at a rate of P45 per pack starting January 1, 2020 and will increase by P5 in the years thereafter until 2023.

Additional excise taxes will likewise be imposed on vapor products such as nicotine salt and conventional "freebase" or classic "nicotines."

During his fourth State of the Nation Address, President Rodrigo Duterte urged Congress to immediately pass the remaining packages of his tax reform programs including those for alcohol and tobacco.

He also called on the legislative branch to urgently approve the second package of the administration's comprehensive tax reform program, or the proposed "Tax Reform for Attracting Better and High-quality Opportunities" law.

The Committee on Ways and Means endorsed the said measure to the plenary earlier in the day. —LDF, GMA News