English
Philippines: DOF sees passage of ‘sin’ tax hike bill by year-end
MANILA, Philippines — The Department of Finance (DOF) expects Congress to pass before the end of the year a bill which would increase taxes on alcohol and electronic cigarette products, now that President Duterte has certified the bill as urgent.
In an interview, Finance Secretary Carlos Dominguez said he has asked lawmakers to swiftly pass Senate Bill 1074 to ensure its implementation at the start of 2020.
He issued this statement after President Duterte certified the bill as urgent to immediately address the need to generate additional revenues, in support of the impending implementation of the Universal Health Care (UHC) program.
“We hope that we can do it before the end of the year so that we can implement the law on Jan. 1,” Dominguez said. “Because if it is passed after Jan. 1, it would be very hard to implement the law mid-way in the year.”
The finance chief said senators have so far given positive response and noted that there is enough time for the bill to be passed before Congress adjourns for its yearend recess on Dec. 20.
“The reception has been very good from the senators. We know that the budget (bill) will take two and a half weeks, so that leaves another three weeks for the bill (SB 1074) to be passed. That’s what we asked the senators,” he said.
Once passed into law, Dominguez said the Bureau of Internal Revenue would issue the bill’s implementing rules and regulations, which is already being drafted.
The proposed adjustments in the excise taxes of alcohol and e-cigarette products are part of Package 2 Plus of the Comprehensive Tax Reform Program (CTRP).
In particular, the package seeks to raise the taxes on various alcoholic beverages, including distilled spirits, sparkling wines or champagnes, still and carbonated wines, and fermented liquor.
Moreover, the DOF also wants to further increase the excise tax on electronic cigarette products to P45 per milliliter, making them at par with regular cigarette packs.
Last Aug. 20, the House of Representatives approved on third and final reading its own version of the bill, as contained under House Bill 1026.
However, Finance Undersecretary Karl Kendrick Chua earlier said the rates in the House-approved bill are lower than the proposed rates of the DOF. As a result, the projected revenue from the measure reached only P17 billion, half of the P33.5 billion expected from the original DOF proposal.
The DOF said proceeds from the incremental taxes on alcohol and e-cigarettes will be used to fund the government’s UHC program, which will require P257 billion in 2020. Currently, the program has a funding gap of around P45 billion.
Source: https://www.philstar.com/business/2019/11/14/1968514/dof-sees-passage-sin-tax-hike-bill-year-end#TqPZ0pctZExQZLB8.99