THE House of Representatives on Wednesday night approved on second reading House Bill 4144 which seeks to revert back to two-tier structure from unitary tax system and increase the tax rate to P32 and P36 per pack beginning next year from the unitary P30 a pack.
The House presided by Deputy Speaker and Capiz Rep. Fredenil Castro passed the measure via voice voting.
The approval came despite stiff opposition from several tobacco groups and even some lawmakers which described the bill as “regressive.”
HB 4144 seeks to amend Republic Act 10351, also known as the Sin Tax Reform Act, which proposed higher excise tax rates for alcohol and tobacco products,
The bill was authored by ABS party-list Rep. Eugene Michael de Vera and sponsored on the floor by ways and means committee chairman Dakila Carlo Cua prior to its approval.
Under the present law, cigarettes with a net retail price of P11.50 per pack were taxed P25 per pack; while those higher than P11.50 will be taxed P29 per pack.
By Jan. 1, 2017, these two-tiers will converge to a unitary tax rate of P30 per pack, the law said.
De Vera said “moving toward a unitary tax in 2017 is aimed to further level the playing field in the cigarette industry and promote competition.”
The bill proposes to increase the tax rate for the lower tier to P32 per pack and the higher tier to P36 per pack.