Projected revenues in alcohol tax rise in Senate bill

MANILA The expected government revenue in the House of Representatives' proposal on higher alcohol taxes is just one-fourth of the Senate's proposed version, an official of the Department of Finance (DOF) said Wednesday.

During the Senate ways and means committee hearing on a bill increasing the excise tax on alcohol products, Finance Undersecretary Karl Chua said the projected revenue impact of the Senate version is pegged at PHP32.3 billion in 2019, as compared to the estimated PHP7.9-billion revenue from the House proposal.

The government is also expected to generate PHP40 billion in revenues in 2020, PHP47.4 billion in 2021, PHP54.6 billion in 2022, and PHP62.4 billion in 2023 from the increased excise taxes proposed in Senate Bill (SB) No. 2197.

Chua said the alcohol tax proposal would help fund the Universal Health Care (UHC) program, and discourage the excessive consumption of the "sin" product.

SB 2197 proposes to increase the ad valorem tax on distilled spirits from 20 percent to 25 percent and increase its specific tax to PHP40 per proof liter.

Chua noted that in the House version, the ad valorem is lower at 22 percent, while the specific rate is at PHP30 per proof liter.

The Senate bill proposes a PHP40 excise tax per liter on fermented liquors, or beer products, while the House bill proposes only PHP28, he noted.

As for sparkling wine products, he said the Senate version proposes an excise tax rate of PHP335, while the House version is doubled to PHP650.

"The House basically shifted part of the burden to the wine but because of the very low market we are not seeing any significant revenue, Chua said.

The excise tax rates for still and carbonated wines do not vary in both versions.

Meanwhile, Health Undersecretary Eric Domingo, at the same Senate hearing, cited World Health Organization data showing that alcohol is directly responsible for one in 20 deaths.

Domingo also noted that alcohol is the seventh leading risk factor for deaths, and is the leading risk factor for deaths among aged 15 to 29, particularly young men.

"As drinkers, it is the responsibility of alcohol consumers to pay the cost of negative alcohol effects in society, such as crimes, drunk driving, domestic abuse, and loss of productivity," he said. (PNA)

Source: Philippines News Agency

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