MANILA—The House of Representatives on Tuesday approved on third and final reading the proposed bill seeking to retain the present two-tier excise tax rate on tobacco products from going to the scheduled unitary tax system by January.
House Bill 4144 was approved through nominal voting with 176 votes, 30 against and 3 abstentions.
Filed by ABS party-list Rep. Eugene Michael de Vera, the proposed measure will amend Section 145 paragraph (c) of the National Internal Revenue Code.
Under the present set-up, cigarettes with a net retail price of P11.50 per pack are taxed P25 per pack; while those priced higher than P11.50 will be taxed P29 per pack.
By Jan. 1, 2017, the system will shift to a unitary tax rate of P30 per pack regardless of retail price.
But under HB 4144, a pack of cigarettes with a net retail price (excluding excise and value-added tax) of P11.50 will be taxed at P32; while a pack with a net retail price of more than P11.50 will be taxed at P36.
In pushing for the bill’s passage, De Vera said his proposal would protect local tobacco farmers, especially from Northern Luzon who would be displaced by the uniform excise tax rate.
“If the law is not amended, this would not prevent consumers from buying high prized cigarettes because the prize disparity between the high priced and low prized cigarettes would be minimal,” De Vera said.
“Imbued by competition, cigarette manufacturers may also opt to import tobacco leaves instead of purchasing the locally grown tobacco leaves considering that tobacco leaves grown abroad are of better quality, thus diminishing the demand for tobacco leaves produced domestically especially for the lower grade tobacco types such as Grade D, E, F-1, F-2 and R,” he said.
House leaders have fully supported the bill.