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House panel okays alcohol tax hike

House Majority Leader Martin Romualdez’s bill mandating an increase in the excise tax rates on alcohol products will be incorporated into similar measures that the House of Representatives’ Committee on Ways and Means will craft.

House panel okays alcohol tax hike
EXCISE TAX ISSUE. Majority Leader and Leyte Rep. Martin Romualdez delivers his sponsorship speech on HB 2467 on increasing the excise tax on alcohol products, heated tobacco products, and vapor products during a briefing with the Department of Finance on priority tax measures. Ver Noveno
During a hearing on Tuesday, the panel adopted House Bill 1026, authored by the panel’s chairman Rep. Joey Salceda of Albay, to be the basis of the consolidated measure that will incorporate the salient features of other bills, including that of Romualdez, providing for an increase in the tax on alcohol products.

A similar bill was passed on Third Reading by the House of Representatives in the 17th Congress but was not passed by the Senate, prompting Albay Rep. Joey Salceda to refile the bill as HB 1026, soon after the 18th Congress convened.

Several legislators including Romualdez filed similar measures.

In a hearing by the committee that Salceda chairs, the panel adopted the bill to increase the excise tax rates on alcohol products and the indexation rate to 10 percent to account for inflation and income.

Rep. Estrellita Suansing of Nueva Ecija raised the motion to approve HB 1026, invoking Rule 10 Section 48 of the House which states: 

“In case of bills or resolutions that are identified as priority measures of the House, which were previously filed in the immediately preceding Congress and have already been approved on third reading, the same may be disposed of as matters already reported upon the approval of majority of the Members of the committee present, there being a quorum.”

The consolidated bill will be drafted into a committee report that will be approved by the ways and means committee, setting the stage for the measure’s approval by the chamber in plenary session.

Rep. Rufus Rodriguez of Cagayan de Oro objected to the swift approval of the measure as he demanded “constitutional right” to hear out lawmakers and stakeholders to raise their concerns on the measure during deliberations.

“There is no equitable taxation if in this Congress the stakeholders are not heard,” Rodriguez said.

Rodriguez was persistent in opposing the approval of the bill, prompting Salceda to stand as the session was suspended while telling Rodriguez: “You are not even a member (of the committee). I just do not want to embarrass you.”

Prior to the HB 1026’s approval, Romualdez, author of House Bill 2467, said in his bill that “imposing higher taxes is still the most effective policy tool to affect prices to discourage consumption of sin products, in particular, among the youth and the poor who are the most sensitive to price changes.”

Romualdez said in his bill that was co-authored by his wife, Rep. Yedda Marie Romualdez, Republic Act 10351 or the Sin Tax Reform Act, that was signed into law on December 2012, “is a good governance measure with a positive impact on both fiscal and public health.”   

He said RA 10351 corrected the long-standing weaknesses of the tobacco and alcohol excise tax system and increased the rates to reduce the demands for these products, he said.  

The Sin Tax Law also raised the much-needed revenues to fund the Universal Health Care (UHC) program of the government.

But he said the passage of Republic Act 11223 or the UHC Law prompted Congress to raise the excise tax on alcohol products to address the funding gap of the UHC Law.

Salceda’s HB 1026 provides that distilled spirits such as brandy, whisky, and alcopops will be imposed a 22 percent ad valorem tax rate on the net retail price per proof plus a specific tax of P30 per liter beginning January 1, 2020.

The bill also mandates that a P5-increase in the specific tax shall then be imposed every year thereafter until it reaches P45 per liter in 2022. In 2023 and onwards, the specific tax for distilled spirits will climb 7 percent each year.

The bill also integrates two specific tax rates for sparkling wine into a unitary rate pegged at P650 or a 15-percent ad valorem tax per liter will be imposed on sparkling wines plus P650 specific tax per liter beginning 2020.  

The specific tax will be raised by seven percent beginning 2020 and every year thereafter.

The bill also provides that cooking wines with a salt content of not less than 1.5 grams for every 100 milliliters will be exempted from the excise tax.

Topics: Martin Romualdez , alcohol products , excise tax , House of Representatives , Joey Salceda
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