Duterte signs new sin tax law
Credit to Author: Catherine S. Valente, TMT| Date: Thu, 23 Jan 2020 16:14:42 +0000
President Rodrigo Duterte has signed into law a bill increasing the excise tax on liquor and heated tobacco and vapor products.
Palace spokesman Salvador Panelo and Sen. Christopher Lawrence “Bong” Go confirmed the President’s action in a text message to The Manila Times.
Go said the new law also expanded the coverage of value-added tax-exempt sales and importation of medicines.
The law amends Sections 109, 141,142, 143, 144, 147, 152, 263-A, 265 and 288-A, and adds a new section to Republic Act (RA) 8424 or the “National Internal Revenue Code of 1997.”
Go said the President vetoed Section 5 of the measure prohibiting search and seizure by the Bureau of Internal Revenue (BIR) without prior court order since it “curtails the power of the State to collect taxes and restrains the enforcement power of the BIR on taxable articles.”
The new law also provides the framework for the Food and Drug Administration to regulate the manufacture, distribution and use of heated tobacco products and vapor products in the country.
“The new law as public health measure is intended to protect the public health from ill effects of sin products and also ensures equitable access and affordable healthcare services to every Filipino through additional revenues for the implementation of RA 1123, otherwise known as the ‘Universal Health Care (UHC) Act,’” Go said.
Malacañang on Thursday released a copy of RA 11467, which Duterte signed on January 22.
In his message to Senate President Vicente Sotto 3rd and House Speaker Alan Peter Cayetano, the President commended the two for passing the new law.
“I am confident that the multi-tiered effect of this law as a cost-effective health measure to reduce smoking and alcohol consumption among Filipinos support the UHC Act,” Duterte said.
“Coupled with its positive impact [on] improving domestic resource mobilization, this measure will significantly reinforce and advance this administration’s commitment to provide a better quality of life for every Filipino,” he added.
Under the new law, excise taxes on distilled spirits will be raised to P42 per proof liter in 2020, P47 in 2021, P52 in 2022, P59 in 2023 and P66 per proof liter in 2024.
Excise taxes on distilled spirits will increase by 6 percent every year starting 2025.
The excise taxes are different from the ad valorem tax imposed on the products, which is equivalent to 22 percent of the price of the distilled spirits.
Considered as distilled spirits are whisky, brandy, rum, gin and vodka, and similar products or products. They will be levied with a P50-excise tax per liter this year. The tax will increase by 6 percent every year beginning 2021.
For beer products and other fermented liquors, a P35-excise tax per liter will be imposed starting this year, P37 per liter in 2021, P39 per liter in 2022, P41 per liter in 2023 and P43 per liter in 2024.
Levies for beer products and other fermented liquors will increase by 6 percent every year starting 2025.
RA 11467 exempts tuba (palm tuba), basi (sugar cane wine), tapuy (rice wine) and similar fermented liquors from higher excise taxes.
Meanwhile, every pack of heated tobacco products with 20 units or more will have an excise tax of P25 in 2020, P27.50 in 2021, P30 in 2022 and P32 in 2023.
Excise taxes for salt nicotine products are at P37 per milliliter or a fraction thereof this year, P42 in 2021, P47 in 2022, and P52 milliliter or a fraction thereof in 2023.
For “freebase” or “classic” nicotine products, excise tax rate is raised to P45 per pack in 2020, P50 per pack in 2021, P55 per pack in 2022 and P60 per pack in 2023.
The excise tax for all vapor products will go up by 5 percent every year in the succeeding years.
RA 11467 took effect on Jan. 1, 2020 after its publication either in the Official Gazette or in a newspaper of general circulation.