Press Release
August 21, 2019

Pia open to higher sin taxes on alcoholic drinks in the Senate

Senate Ways and Means Chair Pia S. Cayetano on Wednesday (August 21) said she is inclined to adopt the Department of Finance's (DOF) proposal to raise excise taxes on alcoholic beverages, with the goal of generating more funds for the Universal Health Care (UHC) Program.

"Technically, I have not adopted anything yet. But I have an open mind to go towards the version of the DOF," the senator said during the Kapihan sa Manila Bay press briefing in Cafe Adriatico, hosted by journalist Marichu Villanueva.

This was in reaction to questions on whether her committee would push for higher sin taxes on alcohol compared to the recently approved House version of the measure.

House Bill No. 1026 was passed on third and final reading on Tuesday (August 20), seeking to impose higher excise taxes on alcohol, heated tobacco, and vape products.

The measure proposes to increase specific taxes on distilled spirits to P35 per liter in 2020, with an ad valorem tax of 22 percent. It also seeks to hike specific taxes on fermented liquors to P32 per liter starting 2020.

The DOF, however, wants to pass a higher version of excise tax rates on alcohol products.

Under their proposal, specific taxes on distilled spirits will be raised to P40 per liter starting 2020, with an ad valorem tax of 25 percent; while specific taxes on fermented liquors, including alcopops, will be raised to P40 per liter by 2020.

The DOF version is targeted to generate P33 billion worth of revenues to fund the UHC program. This is double the amount that the House version is expected to collect, which is P17 billion in one year.

"The primary objective of [increasing excise taxes on sin products] is to support our Universal Health Care program... That's where my passion is coming from to make these [tax reforms] happen," Cayetano said.

"If it will be brought to my attention that it's excessive and not reasonable, then we will have to adjust. But until then, those are the figures that I am looking at," she added.

Meanwhile, the senator assured that her committee will give all stakeholders the opportunity to explain their position in the Senate hearings before she finalizes the committee report.

"Ang goal ko is to have hearings every week. I just want to be sure that all the stakeholders have a chance to be heard on record," she stressed.

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