Increase taxes on vices so that we can reduce taxes on essentials like petroleum products.
This was suggested by House Deputy Speaker Bienvenido “Benny” Abante, Jr., who on Thursday proposed raising the excise taxes on tobacco and alcoholic beverages––commonly referred to as “sin” taxes––to offset the losses from reducing the excise taxes on fuel.
The legislator said that even in the midst of a pandemic, sin tax collections from cigarettes and alcoholic beverages rose from P224.6 billion in 2019 to P227.6 billion in 2020, which exceeded the DOF’s P201.5 billion target.
“Ito ang ‘dagdag-bawas’ na makakatulong sa ating mga kababayan; dagdagan natin ang buwis sa mga bisyo tulad ng sigarilyo at alak, tapos bawasan natin ang buwis sa gas,” said the House leader, who stressed that ordinary Filipinos would suffer from the skyrocketing costs of fuel.
“We can also consider adding taxes on healthy sweetened beverages to raise even more revenue,” added the health advocate.
The lawmaker lamented that “there is going to be a domino effect if fuel prices continue to soar; tataas ang presyo ng transportasyon, which will add to the costs of goods and services.”
“Hindi na rin maiiwasan na humingi ng dagdag sa pamasahe sa PUV (public utility vehicles), forcing ordinary workers to spend more out of their budget for transportation.”
According to Abante, data from the Department of Finance showed the potential of sin taxes to offset the possible losses that could be incurred from suspending or reducing excise taxes on fuel.
“We can also consider adding taxes on healthy sweetened beverages to raise even more revenue.”
The legislator said that even in the midst of a pandemic, sin tax collections from cigarettes and alcoholic beverages rose from 224.6 billion in 2019 to 227.6 billion pesos in 2020, which exceeded the DOF’s 201.5 billion-peso target.
He likewise pointed out that prior to the COVID-19 pandemic, NEDA (National Economic and Development Authority) Director-General Karl Kendrick Chua revealed that the government could raise around 332.3 billion pesos from taxes on ‘sin’ products––redefined to include sweetened beverages––as these would also cover electronic cigarettes such as heated tobacco products, vapor (vaping) products, as well as additional increases in the excise taxes on alcohol and tobacco products.
“My good friend Finance Secretary Carlos Dominguez III informed President Duterte and the Cabinet that the suspension of fuel excise taxes could lead to revenue losses amounting to 105.9 billion pesos. I agree that these funds are needed for vital government programs, but if we just reduce the fuel excise taxes to cushion rising oil prices, then collect additional taxes from sin products, our people will be spared from the hardship caused by these weekly rising gas prices.”