DOF confident of bill passage on higher sin taxes

MANILA, Philippines — The Department of Finance (DOF) is optimistic that bills imposing higher taxes on tobacco and alcohol will be passed before Congress takes a break for the campaign period next month. 

Finance Assistant Secretary Tony Lambino noted that the measures are moving in the Senate and have gained the support of several doctors. 

“Based on how things are moving, it seems Package 2 plus will be passed. Others may also move although we are also open to refiling the other packages,” Lambino said in a press briefing in Malacañang.

“We are open to whatever package moves forward,” he added. 

Congress will go on recess starting Feb. 9. 

Last month, the House of Representatives approved on final reading bills increasing the excise tax on alcohol and tobacco products. The bills aim to raise revenues to fund the government’s Universal Health Care program.  

The measure aims to raise the excise tax on tobacco products by P2.50 every year until it reaches P45 per pack in 2022. The adjustment is expected to raise the tax on cigarettes to P37.50 from P35 in July this year; P40 in July 2022; P42.50 in July 2021; and P45 in July 2022. The bill on alcohol products, meanwhile, aims to impose higher taxes on distilled spirits, sparkling wines, still wines, carbonated wines and fermented liquors.

Senate bills raising the taxes on alcohol and tobacco are still being deliberated at the committee level.

“The legislative process is moving and we are here to support the legislators in any information and analysis they need,” Lambino said.  

Other tax reform measures proposed by the finance department are Package 1B, which seeks to implement reforms in the motor vehicle users’ charge, Package 2, which coversreforms in fiscal incentives, Package 3, which covers reforms in property valuation, and Package 4, which proposes the rationalization of capital income taxation to address multiple rates and different tax treatments and exemptions on capital income and other financial instruments. 

Lambino said the tax amnesty bill, which was passed by Congress last month, has been sent to Malacañang and is being reviewed by the Office of the President.