Duterte signs law imposing higher taxes on alcohol, e-cigarettes

President Rodrigo Duterte has signed a law increasing excise taxes on alcohol, heated tobacco and vapor products as the government aims to raise additional revenues to fund the Universal Health Care program.

Duterte signed Republic Act 11467 on Wednesday, a copy of which was released to the media on Thursday.

The Senate and the House of Representatives ratified the bicameral conference committee report on the measure in December.

Certified as urgent by the President, the measure also includes a provision making the medicines for hypertension, diabetes, and high cholesterol free of value-added tax (VAT) starting January 2020.

Medicines for mental health, cancer, tuberculosis, and kidney diseases will also be VAT-free starting January 2023.

The legislation seeks to reduce consumption on alcohol and tobacco products while generating revenue for the government to fund the Universal Health Care (UHC) law.

Duterte, however, vetoed a provision that requires an internal revenue officer to seek a court order before he or she may be allowed to enter any place where tobacco, heated tobacco and vapor products are produced or kept, or are believed to be produced or kept.

“It effectively curtails the power of the State to collect taxes and renders powerless the BIR to effectively implement enforcement mechanisms against illicit tobacco products,” the President said in his veto message addressed to Congress.

“Such restriction does not exist with respect to any other taxable article.”

He also instructed the Food and Drug Administration to formulate regulations with regard to the proliferation of heated tobacco products and vapor products in the country.

Over a five-year period from 2020 to 2024, the DOF estimates revenues totalling P137.2 billion.

In July last year, Duterte signed a law increasing the excise tax on tobacco products.

Republic Act 11346 imposes an increase of P45 to P60 per pack in excise tax beginning this year to 2023 and then 5% yearly hike effective January 1, 2024.  —NB/KBK, GMA News