MANILA, Philippines (Xinhua) - President Benigno S. Aquino III signed today the sin tax reform measure, which will provide the government additional revenues of P33.96 billion ($827.10 million) in its first year of implementation.
Of the 33.96 billion pesos expected revenue during the first year, P23.4 billion ($569.91 million) will come from cigarettes, $6.06 billion ($147.59 million) from distilled spirits and P4.5 billion ($109.60 million) from fermented liquors.
Aquino, in a speech during the signing ceremony of Republic Act No. 10351, otherwise known as the Sin Tax Reform 2012, hailed the lawmakers for approving the bill, which was pending in Congress for 16 years.
He said that the passage of the measure was an early Christmas gift for millions of Filipinos since they will be covered by the Universal Health Care program and more clinics and hospitals will be established and funded.
Many Filipinos could also shun from smoking and excessive drinking since prices of cigarettes and alcoholic drinks will go up, he added.
The President also assured the sector, particularly the tobacco farmers, who would be affected by the law that the government will continue to support them.
With the implementation of the law, the excise tax incidence for cigarettes, which is the ratio of excise tax to price, will increase from current 29.1 percent to 52.5 percent in 2013 and 63 percent by 2017.
To prevent the excise taxes to be eroded by inflation, the excise tax rates will be increase by four percent every year effective 2016 for distilled spirits, and 2018 for cigarettes and beer, the law said.