Imposing excise tax on single-use plastics (SUPs) could allow the Philippine government to collect ₱58 billion after five years of implementation, according to the Department of Finance (DOF).
With this incremental revenue, the DOF’s fiscal policy and monitoring group (FPMG) has forecast that the levy could net the government ₱11.6 billion on average. The DOF defines single-use plastics as plastic products designed for use only once and then discarded.
In particular, the DOF has proposed imposing an excise tax of ₱150 per kilogram (kg) of SUPs.
Beginning in the second year, the amount will automatically increase by four percent every year, which means ₱156 per kg in the second year, ₱162.24 in the third, ₱168.73 in the fourth, and ₱175.48 in the fifth.
This would cover food packaging, bottles, straws, plastic containers, cups, cutlery, plastic bags, and other similar packaging materials.
Finance Undersecretary Karlo Fermin S. Adriano said during the Philippine Tax Academy (PTA) Convention that the excise tax on SUPs is aimed at discouraging the usage of these products, which, at the macro level, would help mitigate the frequency and magnitude of flooding.
Adriano, citing a 2021 World Bank report, stated that flooding is exacerbated by the 163 million sachets used daily and the 2.7 million tons of plastic waste generated annually.
The excise tax on SUPs proposal is accompanied by other measures being considered for legislation in the 20th Congress, including the General Tax Amnesty (GTA), the extension of estate tax amnesty, and the Qualified Domestic Minimum Top-up Tax (QDMTT).