House approves refiled alcohol tax hike bill

MANILA, Philippines — The House of Representatives approved last night the refiled bill seeking to increase excise taxes on alcohol products.

The House plenary approved via voice vote House Bill 1026, as amended by substitute bill to include nicotine and vape products, on second reading.

Plenary debates on the measure were concluded hours after it was presented by ways and means committee chair and Albay 2nd district Rep. Joey Salceda, the bill’s author. It hurdled the committee level Tuesday.

The Department of Finance earlier made a last-minute appeal to House members to approve the proposed increase in excise taxes of alcohol and elecronic cigarette products in the plenary level (See story on B1).

This bill, already passed during the previous Congress as HB 8618, is the first measure approved by the House in the 18th Congress.

Salceda cited Rule 10 Section 48 of the House, which 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 to fund the universal health care program of the government and to also 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.

The plenary will set the bill for approval on third reading for transmission to the Senate.

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 on 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 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 (350 ml) from P47.80 to P51.70 and of empi light (750 ml) from P93.40 to P99.10.

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

This will result in increase in SRP of San Mig Pilsen (320 ml) from P34.40 to P36.40 and Red Horse (1 liter) from P86.90 to P93.10.