THE House Committee on Ways and Means on Tuesday approved a substitute bill increasing alcohol excise tax rates in the country starting January 2019.
The unnumbered substitute bill seeks to increase the excise tax imposed on distilled spirits by P6.60, compared to what is implemented under Republic Act 10351, or Excise Tax Reform Law on alcohol and tobacco.
Starting January next year, an ad valorem rate of 22 percent including specific tax rates per proof liter of P30, P35, P40, P45 from 2019 to 2022 will be imposed on distilled spirits; and it will be increased by 7 percent annually starting 2023.
Currently, RA 10351 is imposing distilled spirits a P22.40 specific tax and an ad valorem tax of 20 percent.
The committee also approved a shift to a unitary rate of P650 plus ad valorem of 15 percent for sparkling wines, compared to the two-tiered system under RA 10351. It will be increased by 7 percent annually starting 2023.
Meanwhile, the tax on still and carbonated wines with lower than 14-percent alcohol content was increased by P2.10 (from P37.90 to P40), while those with an alcohol content higher than 14 percent saw a P4.10 increase effective January 2019. It will be increased by 7 percent every year thereafter.
Also, the approved tax rate on fermented liquors was P28, or P2.60 higher than the P25.40 tax rate mandated by RA 10351. It will be increased by 7 percent every year thereafter.
House Committee on Ways and Means Chairman Estrellita B. Suansing of Nueva Ecija said the committee report will be submitted to the plenary for another round of
deliberations.
Minimal
JO-Ann L. Diosana, head of the fiscal policy team of nongovernment Action for Economic Reforms, questioned the minimal incremental revenue that the approved tax rates would generate.
“It is very disappointing that the committee in charge of looking for effective revenue-generating measures chose to settle for a measure that would generate only P7.8 billion in incremental revenue, while Suansing’s bill was expected to generate around P43 billion in incremental revenue. It is especially alarming, because a significant funding gap still exists for the UHC [universal health care] bill. Without a sustainable source of funds, we will not be able to reap the benefits of such a landmark reform,” she said.
The UHC bill is currently going through the bicameral conference committee and is expected to be signed into law by the end of the year.
According to the Department of Health, around P164 billion in incremental funds still needs to be generated to ensure its proper implementation.
Health
HEALTH professionals and civil-society groups on Tuesday slammed the approved version of the Ways and Means committee.
In a statement, Maricar Limpin of the Action on Smoking and Health Philippines and head of the Cluster on Public Health of the Philippine College of Physicians, said the committee’s approved version will not prevent Filipinos from being exposed to the adverse health and social effects of alcohol consumption.
“Today is a sad day for the health and well-being of the Filipino people. The alcohol tax rates approved [by the Committee on Ways and Means] will neither prevent Filipinos from being exposed to the adverse health and social effects of alcohol consumption nor generate a significant amount of revenue that would be crucial in funding key health measures in the country,” Limpin said.
“Scientific evidence now shows that alcohol consumption at any levels increases risk to cancers, especially cancers of the gut. More than revenue, we are looking at alcohol tax as a health measure,” Limpin added.
However, the approved rates pale significantly in comparison to the rates proposed in House Bill 8286 authored by Rep. Horacio Suansing of Sultan Kudarat. In his bill, Suansing proposed to increase the tax on distilled spirits by P16.60, a two-tiered system on sparkling wines of P335 for the first tier and P937 for the second, and a tax increase by P14.60 on fermented liquors. The tax rate on still and carbonated wines was the only measure adopted by the Committee on Ways and Means.
Anthony C. Leachon, former president of the Philippine College of Physicians, said every year, there are over 37,000 deaths that are attributable to alcohol consumption, and alcohol drinking prevalence has remained stable at over 40 perccent despite the past tax increase.
“Today’s hearing served as an opportunity to significantly increase the excise tax and discourage its use, the same way the tax increase has decreased cigarette smoking,” the doctor said. “Instead, we were given an alarmingly low tax increase, and the well-being of our countrymen remains at great risk.”