More ‘sin’ taxes to raise P33B for govt – DoF
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Mon, 12 Aug 2019 17:28:35 +0000
ADDITIONAL “sin” taxes under the proposed Package 2 Plus B of the government’s Comprehensive Tax Reform Program (CTRP) could add P36.54 billion to state revenues in its first year of implementation, the Department of Finance (DoF) said.
Package 2 Plus B proposes to further increase excise taxes on alcohol, electronic cigarettes (e-cigarettes) and vapor products to provide more funds for the government’s Universal Health Care program.
Preliminary estimates provided by Finance Assistant Secretary Antonio Joselito Lambino 2nd on Sunday night showed that of the total, P24.7 billion would come from the higher excise tax on fermented beer, P400 million from alcopops, P8.2 billion from distilled spirits, P40 million from wines, and P3.2 billion from e-cigarettes.
Under Package 2 Plus B, the tax rate on alcohol products is aimed to increase to at least P40 per liter.
The Finance department also wants to slap a P45 tax rate per milliliter (ml) for vapor products from P10 per ml, but a discounted rate of P31.5 per ml will be implemented for the 0.7 ml pod.
For heated tobacco, the government proposes a P45-per-pack tax rate. The same will be imposed on regular cigarette packs starting January next year.
The initial revenue estimate from Package 2 Plus B is on top of the P15.5-billion projected tax take from Package 2 Plus A, or the recently passed Republic Act 11346 that imposes higher taxes on cigarettes and a new tax on e-cigarettes and other alternative devices for smoking.
Earlier, Finance Secretary Carlos Dominguez 3rd said his department would prioritize the passage of Package 2 Plus B in the 18th Congress.
“I want to get the ones that have revenue impact out of the way because the revenue measures we have here are to primarily fund the Universal Health Care [program],” he has said.
The program will require an initial budget of P257 billion in its first year of implementation. However, its cost would grow at an average of about P11 billion to P12 billion a year, amounting to a five-year total of about P1.44 trillion by 2024.