House okays hiked excise tax on alcohol

November 27, 2018

A MEASURE that seeks to increase the excise tax on alcohol products was approved on third and final reading in the House of Representatives.

House Bill 8618, principally authored by Committee on Ways and Means chairman Estrellita Suansing, offers a simpler and more efficient tax structure.

According to Suansing another purpose of the bill is to promote better health among Filipinos and provide wider indigent health coverage.

The measure provides that the ad valorem rate for distilled spirits will go up by 2 percent and its specific tax by P6.60 in 2019. For beer, the tax per liter will increase by P2.60 in the same year.

The bill also simplified the excise tax structure through the following: it imposes 15 percent ad valorem and a single specific tax of P650 per liter on wines;  it reduced the category in still wines from three to two;  it removed the distinction between handcrafted beer and those manufactured in factories; and  it indexed the tax rates to 7 percent to take inflation into serious consideration.

During the recent deliberation on the universal health care bill in the bicameral conference committee, Suansing disclosed that there are many questions revolved around the extent of coverage the government can provide given its limited funds.

“How do we pay for the P103 billion health premiums of 65.2 million indigent Filipinos? How do we cover the total requirement of P118 billion this 2019? Levying on the causes of our countrymen’s illness is not just judicious but certainly sensible,” Suansing said.

The bill aims to reduce alcohol drinking, which according to health experts is the seventh leading cause of disability and death.

“The latest global research asserts that the safe level of alcohol drinking is zero, thereby debunking that age old saying that drinking in moderation can aid in one’s well-being. It apparently does not,” she added.

Recognizing that alcohol drinking is part of normal revelry and that a whole labor force may be affected, Suansing assured that excise tax rates will only be raised minimally under the bill.

Moreover, she stressed that since the last tax hike on alcohol products was in 2012, through Republic Act 10351, it is assured that the new rates are fair and reasonable.