House panel approves refiled alcohol tax hike bill

MANILA, Philippines — The House ways and means committee yesterday approved the refiled bill seeking to increase excise taxes on alcohol products.

House Bill 1026, already passed by the House during the previous Congress as HB 8618, was unanimously approved on first deliberation by 43 members of the committee chaired by the measure’s author, Albay 2nd district Rep. Joey Salceda.

The voting for the adoption of HB 1026 came after committee member and Nueva Ecija 1st District Rep. Estrellita Suansing invoked Rule 10, Section 48 of the House.

The rule allows committees to dispose priority measures already filed and approved on third reading in the immediately preceding Congress.

The bill was among the priority legislative measures specified by President Duterte during his State of the Nation Address last month.

It aims to generate revenue for the government’s universal health care program and reduce consumption of alcohol products.

Salceda said the measure is expected to generate P33.6 billion in additional revenue for the government in 2020, P42.1 billion in 2021 and P50.3 billion in 2022.

With its approval, the panel has moved to endorse the bill to the House rules committee to set the measure for deliberations in the plenary.

HB 1026 specifically proposes to increase the excise tax on alcohol products and the indexation rate to 10 percent.

Under the measure, the current ad valorem tax imposed on distilled spirits – including the popular Ginebra San Miguel round or gin bilog, and Emperador Light brandy or empi light – will increase from the current 20 percent, under the National Internal Revenue Code, to 22 percent, while the specific tax will increase from P24.33 to P35 per proof liter starting Jan. 1, 2020.

A P5 increase in the specific tax will 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 seven percent each year.

This will translate to increase in standard retail prices (SRP) of gin bilog 350ml from P47.80 to P51.70, and of empi light 750ml from P93.40 to P99.10.

HB 1026, however, imposes a lower increase in excise tax on alcohol products as compared to the proposal of the Department of Finance (DOF), which wanted the ad valorem tax on distilled spirits increased to 25 percent and the specific tax to P40 per liter.

On the other hand, the bill will increase the specific tax on fermented liquor, like the popular San Miguel Pale Pilsen and Red Horse beer, from P26.43 to P32 per liter.

This will result in an increase in SRP of San Miguel Pale 320ml from P34.40 to P36.40, and Red Horse 1L from P86.90 to P93.10.

The bill will also impose a 15 percent ad valorem tax per liter, plus P650 specific tax per liter on sparkling wine. The specific tax will be raised by seven percent beginning 2020, and every year thereafter.

Cagayan de Oro 2nd District Rep. Rufus Rodriguez objected to the swift approval of the refiled bill, arguing that returning lawmakers like him were unable to scrutinize the measure during the last Congress.

Rodriguez, who filed his own version of the bill, said stakeholders should be given opportunity to air their sides.

“I wasn’t here in the 17th Congress. I wasn’t able to listen to the DOF. Newcomers were not present in the earlier deliberations... There is no equitable taxation if in this Congress the stakeholders are not heard,” he lamented.

But committee member, Rizal 1st district Rep. Michael John Duavit, stressed that the concerns of stakeholders – including alcohol manufacturers – have already been tackled in earlier deliberations.

“We extensively discussed with stakeholders. If we go to regular process, as the clock runs, the increase in revenue and our legislative output will be pushed back,” the lawmaker pointed out.