Higher alcohol taxes to raise P237B – DoF
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Mon, 11 Mar 2019 16:24:17 +0000
A Senate bill calling for higher excise taxes on alcohol products could generate P237 billion in additional revenues over a five-year period, the Finance department said.
In a statement, Finance Undersecretary Karl Kendrick Chua estimated that Senate Bill (SB) 2197 would raise around P32.3 billion in the first year of its implementation, P40 billion in 2020, P47.4 billion in 2021, P54.6 billion in 2022 and P62.4 billion in 2023.
Like a proposed hike in cigarette taxes, increasing taxes on alcohol products would help close a P40-billion funding gap in the universal health care program, Chua added.
SB 2197 calls for an ad valorem tax equivalent to 25 percent of the net retail price (excluding value-added and excise taxes) per proof and a
specific tax of P40 per proof liter starting 2019.
The specific tax will increase by P5 per proof liter every year thereafter until 2022, after which it will be raised by 10 percent annually.
The bill also proposes a P335 tax on sparkling wines and champagne for those costing P500 or less per 750-milliliter bottle and P937 for those costing more than P500.
Still wines and carbonated wines containing 14 percent alcohol or less will be taxed P40 per bottle while those with more than 14 percent but not over 25 percent alcohol will be taxed P80.
The tax rates for wines will increase by 10 percent every year thereafter effective 2020.
Fortified wines containing more than 25 percent alcohol by volume will be taxed as distilled spirits.
For fermented liquors, the tax shall be P40 per liter in 2019, regardless of where these are sold or manufactured, and will increase by P5 per liter until 2022.
The rate will then be increased by 10 percent every year thereafter.
Chua said the higher taxes would only increase inflation by 0.1 percentage points.
The Bangko Sentral ng Pilipinas expects inflation to hit 3.06 percent this year and ease to 2.98 percent in 2020, falling within the 2.0-4.0 percent target.
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