Duterte certifies bill raising sin taxes as urgent

Published January 8, 2019, 10:55 AM

by Patrick Garcia

By Genalyn Kabiling

President Duterte has agreed to certify as urgent a bill increasing the excise tax rate on alcohol and tobacco products to raise funds for the government’s health care program.

President Rodrigo Roa Duterte delivers his message during the birthday celebration of former Presidential Adviser on Political Affairs Atty. Francis Tolentino held at the Tagaytay International Convention Center in Tagaytay City, Cavite on January 3, 2019. (VALERIE ESCALERA/PRESIDENTIAL PHOTO / MANILA BULLETIN)

The President approved the proposal of the Department of Health (DOH) and the Department of Finance (DOF) on the higher taxes on sin products during a Cabinet meeting last Monday in Malacañang, according to his spokesman Salvador Panelo.

“The recommendation of the Department of Finance is that this bill should be certified as urgent,” Panelo said during a Palace press briefing.

“Under the proposal, the tax on tobacco will be raised to P60 per pack while on the part of alcohol it will be P40 per liter so the recommendation is that bill should be passed and signed into law. That was what was approved last (Monday) night,” he said.

Panelo said the proposed tax reform measure aims to raise revenues as well as discourage consumption on alcohol and tobacco products.

“This is a key public health measure to reduce deaths and disabilities due to tobacco and alcohol consumption and, at the same time, a revenue measure to fund the universal health care program,” he added.

After the controversial passage of the first Tax Reform for Acceleration and Inclusion (TRAIN) law, the administration has vigorously pushed for the swift approval of the second package of the comprehensive tax reform program in Congress. The proposed tax reform measures included additional exercise taxes on tobacco and alcohol products.

Last December, the House of Representatives approved on third and final reading the proposed higher taxes on sin products sin taxes.

The measure seeks to impose an additional P2.50 exercise tax on tobacco products annually until it reaches P45 in 2022, and then a 4-percent increase every year thereafter.

Another bill, approved by the House, will also raise the excise tax on distilled spirits to 22 percent, including specific tax rate of P30 per liter in 2019. The tax rate will increase by P5 every year until it reaches P45 in 2022. It will also be raised by 7 percent annually starting 2023.