Finance Undersecretary Karl Kendrick Chua on Wednesday braced for a P32.3- billion additional revenues in 2019 from an increased excise tax on alcoholic products that will be used to bankroll the implementation of the Universal Health Care.
The UHC, awaiting signature by President Rodrigo Duterte, intends to provide free health services to all Filipinos.
Testifying during the Senate ways and means committee hearing on the proposed measure to raise excise tax in tobacco, Chua said the increased excise tax would address the P40-billion gap needed for the government’s UHC program.
Aside from providing quality health care, an excise tax hike would discourage excessive consumption of alcohol.
The purpose of this increase, he said, is to cover excise taxes, specific tax based on weight, alcohol content of alcoholic drinks and to adjust ad valorem.
He emphasized that the price of alcoholic drinks in the Philippine is so far the cheapest and most affordable in the (Southeast) region. He said the cost of San Miguel Beer in the region is relatively low.
With the raise in excise tax, he said, this will also generate P40 billion in revenues in 2020, P47.4 billion in 2021, P54.6 billion in 2022, and P62.4 billion in 2023, which makes a total of P236 billion in five years.
The Finance department’s proposal made jointly with the Department of Health provides that distilled spirits would be levied 25 percent ad valorem (value added) tax per proof with a specific tax of P40 per proof liter.
Senator Manny Pacquiao filed a Senate bill that seeks a 25-percent tax rate on the retail price per proof liter of distilled spirits and an ad valorem tax of P40 per liter.
He said excessive drinking was dangerous to health and bad for the society.
He cited the World Health Organization study which states that one of the 20 deaths was related to alcohol drinking.
PhilHealth Independent Director Anthony Leachon told the panel chaired by Senator Juan Edgardo Angara that the excise tax burden was still low compared with the excise tax burden in other Asean countries.
For the youth, he said, there is absolutely no safe level of drinking.
“So the excise tax is perfect as a measure to curb taking alcoholic drinks. He said price measures are effective in preventing the young and the poor from drinking.
While alcohol can be used safely by many patients, and moderate alcohol consumption has been associated with decreased mortality and may have cardiovascular benefits, however, excess alcohol intake is associated with increased mortality and other medical morbidities.
He said alcohol use has also been associated with an increased risk of accidents and trauma, violence, and suicide.
“There have been no long-term randomized trials of alcohol consumption on clinical outcomes. While there is strong evidence of causality based upon epidemiologic studies and short-term trials have found beneficial effects on cardiovascular risk factors, it remains possible that some of the health benefits and risks of alcohol consumption represent associations unrelated to the intake of alcohol itself,” Leachon further told Angara’s panel.
Last December, the House of Representatives passed on third and final reading a measure that seeks to raise excise taxes on alcohol products.
House Bill No. 8168 seeks to impose a 22-percent tax rate on retail price per proof of distilled spirits, such as brand and whiskey, as well as a specific tax of P30 per liter.
Health Undersecretary Rolando Domingo said raising alcohol tax was the most effective way to discourage alcohol consumption and reduce accessibility of alcohol products among the youth and the poor.
He said increasing alcohol tax is the most effective way of taking it out of hand.
Aside from being a risk factor of death, it also triggers higher crimes, drunk driving, and domestic violence, among others.