MANILA -- To further institute reforms in Philippines’ sin taxes and strengthen moves to prevent the poor and young people from taking alcoholic products, the Department of Finance (DOF) is proposing further increase in excise taxes of these products.
DOF data show that under the proposed rates for 2019, ad valorem tax of distilled spirits will be hiked to 25 percent from the current 20 percent of the net retail price, which excludes the excise tax and the value added tax, per proof.
Under the reformed Sin Tax Law of 2012, an additional PHP20 per proof liter specific tax will be slapped on distilled spirits starting 2015.
This rate was mandated to be increased by 4 percent annually starting 2016.
This rate, however, is proposed to be increased to PHP40 by 2020, which is the target year of implementation of the proposed hikes in alcoholic products. A PHP5 increase in specific tax is also being considered annually until 2023.
Relatively, excise tax of sparkling wines or champagne that has a price of PHP500 or less per 750 ml bottle will be PHP334.59 for 2020, PHP368.04 for 2021, PHP404.85 for 2022 and PHP445.33 by 2023.
For those priced PHP500 and up of the same volume, excise tax by 2020 is proposed to be PHP936.82 while it is PHP1,030.50 by 2021, PHP1,133.55 by 2022 and PHP1,246.91 by 2023.
For still wines and carbonated wines with 14 percent or less alcohol content, the proposed excise tax by 2020 is PHP40.15 while it is PHP44.17 by 2021, PHP48.59 by 2022, and PHP53.45 by 2023.
For those with alcohol content of more than 14 percent but not more than 25 percent, an PHP80.31 per liter excise tax is being proposed for 2020, PHP88.34 by 2021, PHP97.17 by 2022; and PHP106.89 by 2023.
Proposed excise tax of still wines and carbonated wines with more than 25 percent alcohol content will be the same as those of distilled spirits.
In 2013, when the reformed Sin Tax Law was implemented, excise tax of a 750 ml bottle of sparkling wine or champagne regardless of proof is PHP250 for those priced PHP500 or less while it is PHP700 for those priced more than PHP500.
Still wines and carbonated wines that have 14 percent alcohol content were taxed PHP30 while those with more than 14 percent but not more than 25 percent or PHP60.
However, the law mandated that these rates shall be increased by 4 percent every year starting 2014.
Meanwhile, excise tax of fermented liquors is being eyed at PHP40 per liter by 2020, PHP45 by 2021, PHP50 by 2022 and PHP55 by 2023.
All these rates are proposed to increase by 10 percent annually starting 2024.
Earlier, Finance Secretary Carlos Dominguez III said these tax hikes are being considered not primarily to raise revenues but to lessen consumption by the poor and address ballooning cost for the government.
These higher rates are included in the proposed Package 2 Plus of the Comprehensive Tax Reform Program (CTRP) that DOF has submitted to Congress.
Of the total collections from alcohol, 70 percent are from beer while the remaining 30 percent are from the other products.
“We want to keep the ratio because cigarette taxes has risen,” he said.
Finance Assistant Secretary Tony Lambino has also said that for 2020, the estimated revenue gains from sin products is around PHP61.3 billion while it is PHP77.6 billion in 2021. (PNA)
