House to insist on lower liquor tax

MANILA, Philippines — The House of Representatives will insist on its version of the liquor tax increase bill, which proposes rates much lower than those suggested by the Department of Finance (DOF) and the Department of Health (DOH).

“See them in the bicam (bicameral conference). We will stick to our version,” Albay Rep. Joey Salceda, who chairs the ways and means committee, said yesterday.

He was commenting on the statement of his Senate counterpart, Pia Cayetano, that she would adopt the DOF version and endorse it to the Senate for approval.

Last week, the House approved the bill increasing taxes on beer and other alcohol products on third and final reading. The secretariat has been directed to immediately transmit it to the Senate.

If the Senate goes for the DOF version, the two chambers will convene a conference to come up with a compromise.

The proposed increase in alcohol taxes is intended to discourage booze consumption and at the same time raise revenues for the universal health care program, which will be implemented starting next year.

The Salceda committee opted to recommend lower rates despite studies showing that alcoholism is costing taxpayers about P200 billion a year, the bulk of which the government spends to treat at least 39 drinking-related diseases.

The studies also show that with higher levies, as many as 15,000 Filipinos could be saved from dying in 2020 due to these ailments, which include psychotic disorder, degeneration of the nervous system, fatty liver, hepatitis, cirrhosis of the liver, hepatic failure, gastritis, pancreatitis and behavioral disorders.

This year is the first time lawmakers are considering an increase in alcohol taxes since the last adjustment in 2012. It is not clear why they waited for seven years despite the nefarious and even deadly effects of liquor drinking, and why they chose lower rates.

The DOF-DOH wanted bigger increases. For instance, in the case of beer, the two agencies proposed a tax of P40 per liter (about three bottles) versus the House-approved P32.

Projections made by the Salceda committee and the DOF-DOH show that the suggested retail price (SRP) of San Miguel Pale Pilsen (320 milliliter) would go up by P2 per bottle under the House version or P4.80 under the DOF-DOH version.

For San Miguel’s Red Horse (1,000 ml), its SRP would jump from P86.90 to P93.10 (House) or P102.10 (DOF-DOH).

Ginebra San Miguel Round or gin bilog (350 ml), now selling for P47.80, would retail for P51.70 (House version) or P54.10 (DOF-DOH).

Emperador Light (750 ml), manufactured by Emperador Distillers Inc., now retailing for P93.40, would sell for P99.10 (House) or P102.70 (DOF-DOH).

Prices of mixed drinks (known as alcopops) with up to 10-percent alcohol content will also go up.

For example, the SRP for Tanduay Ice (330 ml), produced by Tanduay Distillers, would increase from P29.50 to P30 (House) or P42.90 (DOF-DOF).

The price of Gaz (200 ml), made by Distilleria Limtuaco, would increase from P25 to P25.40 (House) or P32.60 under the DOF-DOH version.

The studies made jointly by the Salceda committee and the DOF-DOH also show that alcohol consumption had been rising since the last tax increase in 2012.

“Increasing alcohol volume levels indicate that there is room for further excise tax increases,” according to a document handed out by Salceda to journalists.

The document states that higher levies do not affect the profits of liquor makers because these companies pass on the entire amount of taxes to consumers. The revenues of manufacturers between 2012 and 2017 were all in the tens of billions, with dominant player San Miguel Brewery reporting P63.8 billion in 2012, which soared to P101.8 billion in 2017.