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Friday, March 29, 2024

Solon backs higher levy on other vices

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A veteran lawmaker urged the House of Representatives to explore a higher levy on other ‘sin’ products following the approval of House Bill No. 4144 that further raised taxes on cigarettes.

Oriental Mindoro 2nd District Rep. Reynaldo V. Umali lauded the proposal of colleague Rep. Jericho Nograles to further increase the value-added tax on alcohol, instead of imposing higher excise taxes on diesel and other fuel products.

Lawmakers opposed the imposition of excise tax on petroleum, removal of VAT exemptions for senior citizens and person with disabilities, and ad valorem tax on automobiles being strongly pushed by the Department of Finance.

Umali said lawmakers were doing their best to address foregone government revenues in line with the current administration’s bid to lower the personal income tax to ease the overburdened Filipino working class, adding the best way to do so was taxing vices.

He said the approval of House Bill No. 4144 was a step in the right direction.

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The bill seeks to amend Section 145 (c) of Republic Act No. 10351 by imposing a two-tier tax system that further increases the levy on tobacco products than in the original version of the law.

The measure proposes a two-tier tax system that levies P32.00 tax per pack on tobacco products priced lower than P11.50 (non-premium), and a higher P36 tax per pack for products exceeding P11.50 (premium). 

“Increasing taxes on necessities like petroleum will have massive inflationary effects that will negate the [Duterte] administration’s social-reform agenda of easing the ordinary Filipino’s financial burdens,” said lawyer-economist Umali

President Rodrigo Duterte in his first State of the Nation Address in July strongly asserted his administration’s plan to pursue tax reforms towards a simpler and more equitable tax system.

Among the President’s priorities is to provide lower income tax rates in order for Filipinos to have sufficient income at the household level.

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