MANILA, Philippines - The chairman of the House ways and means committee has filed a bill that would restructure excise taxes on distilled spirits such as liquor.
Batangas Rep. Hermilando Mandanas said his Bill 4787 would “erase the perceived discrimination between locally produced distilled spirits and against imported ones.”
“This proposal would send a positive signal to the global community that our country is serious in ensuring that our tax laws are in compliance with international agreements,” he said.
The country is facing a suit at the World Trade Organization (WTO) in Geneva, Switzerland. It was filed by European wine and liquor exporters who claim that the Philippines is not complying with WTO rules calling for a fair tax treatment on local and imported distilled spirits and alcohol products.
Aside from equalizing the tax treatment on these products, Mandanas said his proposal would also result in incremental revenues for the government.
He said the present law prescribes that tax rates on distilled spirits be based on the raw materials used.
He said his bill would remove this qualification, which means that the tax would be equally applied on wine and liquor products, whether made from local or imported materials.
He added that the tax would be based on the selling price and per proof liter.
Under the bill, P29.36 will be collected per proof liter of distilled spirits that cost P70 and below; P44.04 per proof liter of those that cost more than P70 up to P120; P58.72 per proof liter of those that cost more than P120 up to P180; P158.73 per proof liter of those that cost more than P180 up to P250; P317.44 per proof liter of those that cost more than P250 up to P675 and P634.90 per proof liter of those that cost more than P675.
Mandanas said with the restructuring of the excise tax on distilled spirits, the government would generate a sizeable amount of additional revenues necessary to finance the annual fiscal deficit the national government is facing.
“The requirements of the national government for higher tax collection consequent upon good governance to finance social and infrastructure needs demand an increase in the amount and sphere of excise taxation of distilled spirits,” he said.
“The potential incremental revenue will have an economic impact and will hopefully trickle down to the greater majority of our citizenry who will benefit with the improved government services under the present administration,” he said.
Mandanas is a party mate of President Aquino in the Liberal Party.