Taxes on beer, other alcohol products to go up

MANILA, Philippines — The House of Representatives committee on ways and means agreed in principle yesterday to increase taxes on beer, wine and other alcoholic beverages.

The committee, chaired by Nueva Ecija Rep. Estrellita Suansing, arrived at the agreement in the course of a hearing attended by Speaker Gloria Macapagal-Arroyo.

The panel created a technical working group that would consolidate two bills seeking higher liquor taxes authored by Deputy Speaker Sharon Garin and Suansing’s husband Horacio, representative of Sultan Kudarat’s second district.

The group would receive inputs from industry players.

The two authors said alcohol taxes have to be increased as the last time they were adjusted was in 2012.

Sultan Kudarat’s Suansing said the 2012 law containing the adjustment was supposed to be a revenue statute and health measure that aimed to reduce alcohol consumption.

“However, between 2012 and 2015, there was a dismal 1.36 percent reduction in alcohol use among Filipinos. The rates were not enough to discourage consumption,” he said.

He said his bill would raise an additional P194 billion that could be used to expand the government’s universal health insurance program.

Garin said the government continues to shoulder a huge cost for treating alcoholism-related ailments.

A Department of Finance official told the committee that imposition of higher alcohol products is part of the administration’s Tax Reform for Acceleration and Inclusion (TRAIN) program.

Minority Leader Danilo Suarez said he and his minority colleagues would continue to oppose higher taxes.

“We don’t need additional revenues. We have P1.3 trillion in unspent appropriations,” he said.

Representatives of industry players like San Miguel Corp., Asia Brewery, Tanduay Distillers, Emperador Distillers and Distileria Limtuaco said they support the objectives of the Suansing and Garin bills.

However, they said they would want the proposed higher rates to be “equitable.”

Responding to queries from her colleagues, Suansing, the committee’s chair, said Congress had already increased tobacco taxes under the controversial TRAIN law.

She said the law sets a single tax rate for cigarettes. However, she said the House has approved a bill reverting the method of taxation to the old two-tier scheme, under which there would be different tax rates for low-priced and high-priced cigarettes. She added that the measure is now pending at the Senate.

The Garin and Suansing bills call for imposing a constant ad valorem (based on value) tax of 25 percent and a rising specific levy per liter on distilled spirits.  

The levy would start at P40 on Jan. 1, 2019, increasing to P45 in 2020, P50 in 2021 and P55 in 2022. It would be increased by 10 percent every year starting on Jan. 1, 2023.

The same rates of specific tax per liter are proposed for beer and other types of fermented liquor.