Senate to approve ‘sin tax’ hike bill next week

MANILA, Philippines — The Senate will finally approve the bill increasing the tax on beer and other alcohol products and taxing e-cigarettes and vape next week after months of considering it.

The House of Representatives, where tax bills must originate by mandate of the Constitution, transmitted the measure to senators four months ago.

Approving the proposed law before next Thursday is the agreement between the House committee on ways and means and its Senate counterpart, Albay Rep. Joey Salceda told reporters yesterday.

“That’s our agreement. In fact, we already set our bicam for Thursday,” he said. Salceda, who chairs the ways and means, was referring to the bicameral conference the two chambers of Congress routinely convene to reconcile their divergent versions of a bill. His Senate counterpart is Pia Cayetano.

Salceda said Congress is aiming to send to President Duterte two proposed laws before yearend.

“The two laws that will emerge are the budget and, of course, taxes to pay for it, especially the deficit. So the excise tax on alcohol and vape will definitely come out,” he said. The projected budget deficit for next year is P650 billion, he said.

He added that the alcohol and vape tax would bring in additional revenues of P33 billion a year.

The House approved a levy of P28 per liter on beer and other fermented drinks, while the Department of Finance (DOF) wanted P40. Some senators are proposing P60 per liter. The tax was last adjusted more than 10 years ago.

In the case of cigarette substitutes, the House has suggested P25 tax per milliliter of vaping liquid. Salceda said he would propose that P25 be increased to P45.

“We have one million vapers. They all belong to the A-B classes. They can afford it,” he said.

He said one popular American-made vaping product sells for P1,600.

At the same time, Salceda urged the Senate to approve a few other tax bills the House submitted months ago.

The measures included the proposed Corporate Income Tax and Incentives Reform Act (CITIRA) and the Passive Income and Financial Intermediary Transaction Act (PIFITA).

CITIRA aims to reduce corporate income tax from 30 percent to 20 percent over 10 years and withdraw fiscal or tax incentives from businesses that have enjoyed them for up to 35 years over a “transition period” of two to five years.

The proposed law would prescribe a new incentives regime that is “time-bound and performance-based.”

The DOF is the originator of CITIRA, which the Department of Trade and Industry and some business groups are opposing.

Trade Secretary Ramon Lopez announced on Tuesday that Sen. Cayetano would file her own watered-down version of CITIRA that would address the objections of Lopez and certain business groups.- With Non Alquitran