Sin taxes should be adjusted every 3 years —solon
To effectively address health concerns arising from consumption of tobacco and alcohol products, excise taxes should be adjusted every three years as income generation rapidly catches up with higher levies, a lawmaker said Tuesday.
Last week, President Rodrigo Duterte signed Republic Act No. 11467, a new law increasing excise taxes on alcohol products and imposing new duties on heated tobacco products.
With the new law in place, distilled spirits such brandy, gin, vodka, tequila, and whiskey would be charged a specific tax of P42 per proof liter, on top of a 22% tax representing excise and value-added taxes. Levies will increase to P47 per liter in 2021, P52 per liter in 2022, P59 per liter in 2023, and P66 pesos in 2024.
On the other hand, taxes on beer and fermented liquor will hike to P35 per liter this year and increase by another P2 per liter every year starting 2021 until 2024.
Heated tobacco products will have a P25 per pack increase in 2020, which will go up by P2.50 every succeeding year until it goes up to 32.50 come 2023.
While new excise taxes on sin products is expected to reduce public consumption, Albay Representative Joey Salceda said every administration should review sin measures to ensure it is adjusted to gross national income (GNI) per capita.
“Kailangan ulit taasan after three years kasi hahabulin ng per capita increase, very rapid ang growth... Inaasahan na after 18 months balik na ulit sa dati,” he said.
The lawmaker said automatic indexation of sin taxes to GNI per capita may not be effective as tobacco and alcohol beverage manufacturers are very innovative in capturing changes in the public’s consumption preferences.
“Mga mga nag-a-address na 6% [increase] per year. But if you want a radical and disruptive impact on non-communicable diseases you really have to push and push it,” Salceda said.
“It could be a new priority for a new president... we need to address talaga as they emerge,” he said.
“I think every three years, we need to go to it. We need to keep coming back to it,” the lawmaker said.
For her part, Senate Ways and Means chairperson Pia Cayetano said she will push for a more “comprehensive approach” to address smoking and binge-drinking.
The additional excise taxes is expected to generate some P22 billion in revenues for the government. Revenue generated from sin taxes will be used to fund the implementation of Universal Health Care law. —LDF, GMA News