TWG formed to consolidate bills seeking to increase, restructure excise tax rates on alcohol products

Published October 2, 2018, 4:30 PM

by AJ Siytangco

By Charissa Luci-Atienza

The House Committee on Ways and Means formed on Tuesday a technical working group (TWG) to consolidate bills seeking to increase and restructure the excise tax rates on alcohol products.

The panel, chaired by Nueva Ecija Rep. Estrellita Suansing, approved a motion made by Deputy Speaker and AAMBIS-Owa partylist Rep. Sharon Garin, author of the bill, creating the panel that would “incorporate the inputs of the stakeholders” with House Bills 4839 and 8286.

The Joint Session of the Senate and the House of Representatives on the extension of Martial Law in Mindanao commences in the Plenary of the Batasang Pambansa on December 13, 2017. (ALVIN KASIBAN / MANILA BULLETIN)

HBs 4839 and 8286 both seek to amend Sections 141, 142 and 143 of Republic Act 8424, the National Internal Revenue Code (NIRC) of 1997.

“It is high time we review taxes on alcohol since tobacco has undergone many increases already last year. The tax rate on alcohol has not been amended, it is high time to review this,” Garin said during a hearing.

Garin authored House Bill 4839 which seeks to increase the excise tax rates on distilled spirits, wines, and fermented liquors.

“According to the Bureau of Internal Revenue, 70 percent of the total excise tax collection was collected from tobacco and cigarette products while only 30 percent was collected from alcohol products. This means that tobacco and cigarette products are heavily taxed than that of alcohol products because of the health effects,” she said.

“Tobacco and cigarette products have adverse health effects while alcohol is believed to have certain health benefits when drunk moderately,” she said.

During the hearing, San Miguel Corporation, Diageo Philippines Inc. and Heineken Philipines expressed support to the measures, even as they expressed hope that that tax system will be equitable and that the hike in excise tax will be moderate.

Under Garin’s bill, the two-tier tax structure will be retained for the fermented liquors to level the playing field of the stakeholders producing alcohol products through domestic raw materials with that of using imported raw materials.

“Although the 15th Congress had passed the Republic Act No. 10351, otherwise known as the Sin Tax Reform Act with the effectivity on January 1, 2013, which restructures and increases the tax structures and rates, respectively, for both tobacco and alcohol products, I believe that such tax rates has not yet saturated to achieve the much-needed revenue of the government,” Garin said.