By Gillian M. Cortez, August 7 2019; Business World
Image Credit to Philippine Star
ALBAY 2nd District Representative Jose Ma. Clemente S. Salceda committed to approve at committee level next week a bill increasing taxes on alcoholic beverages.
He added that the ways and means committee, which he chairs, is also working on other measures seeking to raise taxes on electronic cigarettes to at least P25, and possibly to P45.
Speaking at the Kapihan sa Manila Bay press briefing on Wednesday, Mr. Salceda told reporters that during a Monday meeting preceding the Legislative Executive Development Advisory Council (LEDAC) session, participants determined that the priority measure is to increase excise taxes on alcoholic beverages.
“Sa pre-LEDAC na ginawa sa Malacañang (At the pre-LEDAC meeting in Malacañang), it was the consensus number one measure to be approved,” he said.
“Please expect that the alcohol taxes will be approved (at committee level) by Tuesday,” added Mr. Salceda. He added that the measure, which was approved on third reading by the previous Congress, will benefit from House Rule 48, which allows all bills that advanced that far in the previous sitting of Congress to be reported out of committee with a majority vote from the panel.
At the same event, Finance Undersecretary Karl Kendrick T. Chua said that excise taxes for alcoholic beverages need to keep up since taxes on tobacco products have increased twice.
“Nag iiincrease tayo sa tobacco products twice na since 2012 but ang alcohol hindi sumasabay. (We have increased tobacco taxes twice since 2012 but alcohol has not kept up) Pangalawa ay anggrowing risk of consuming alcohol products. (Second, we also need to consider the risk from increased consumption of alcohol). As the country grows richer, as the people grow richer, they can afford but the health cost they cannot afford,” Mr. Chua said.
He added that the expected revenue from raising taxes from alcoholic beverages will hit P33 billion alone in the first year of implementation.
On the other hand, both officials expressed the need to raise taxes on e-cigarettes and vaporizers (vapes). Under the recently passed Republic Act 11346, such non-tobacco products are taxed P10 but the proposal is to charge the segment the same tax levied on tobacco products.
“Ang gusto natin itaas pa ay yung e-cigarette kasi yung mga heated tobacco and vapes ay mababa.Ten peso so hindi ito aligned sa regular cigarettes. Ang gusto po namin ay ihain sa congreso angadditional increase only for the e-cigarettes (We want to raise the e-cigarette and vape tax which at P10 is currently low, and not aligned with the tax on regular cigarettes. We would like to propose to Congress an additional increase for e-cigarettes…) to P45 next year,” Mr. Chua said.
Mr. Salceda said the new tax on e-cigarettes will be at least P25, adding “Definitely a tax on vape is on the table… Further increase, definitely we will increase it. P45 is our target. If you ask me, hindi yan bababa sa P25.”
Projected revenue for this measure is P700 million for the first year of implementation. According to data obtained by BusinessWorld from the Committee on Ways and Means regarding the revenue impact of raising both excise taxes on alcohol and vapes, such a measure could raise P34.03 billion in 2020, P42.90 billion in 2021, and P51.10 billion in 2022. — Gillian M. Cortez