The Senate has already approved the third and final reading of the bill to increase tax of “sin” products such as alcohol, heated tobacco products, and vapor cigarettes.
Twenty senators voted in favor of the proposal that is expected to bring in an additional P20-P24 billion in taxes annually in addition to the P100 million collected from “sin products.”
In the approved version of the Senate, P26 will be allocated to specific taxes on distilled spirits and alcopops by 2020, in addition to 50 percent of the net retail price (NRP).
Senate approved higher tax for “sin” products
By 2021, the specific tax will be P30 in addition to the 50 percent NRP. It will be adjusted to P33 in addition to 50 NRP by 2022; P37 and P41 in 2023 and 2024, respectively.
For sparkling wines, the P50 specific tax will be imposed for 750-milliliter bottles with an NRP of P500 or more by the year 2020. By 2021 and beyond, the P50 rate will be increased by six percent annually.
Of the “still wines” and carbonated wines, the P50 specific tax rate will also increase next year and a six percent increase beginning 2021.
Vape products will have similar tax rates imposed on conventional tobacco products and P45 per pack excise tax by 2020.
Also read: BIR to POGOs: pay the right taxes
Sin Tax Law in the Philippines
Republic Act 10351, or the Sin Tax Reform Law, is one of the landmark legislations under the Aquino Administration. It is primarily a health measure with revenue implications, but more fundamentally, it is a good governance measure.
The Sin Tax Law helps finance the Universal Health Care program of the government, simplified the current excise tax system on alcohol and tobacco products and fixed long-standing structural weaknesses, and addresses public health issues relating to alcohol and tobacco consumption.