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HOUSE APPROVES BILL RAISING TAXES ON ALCOHOL PRODUCTS, CIGARETTES

The House of Representatives approved on third and final reading the bill proposing to increase the excise tax on alcohol and heated tobacco and vapor products.

House Bill 1026 was approved with 184 affirmative votes, two negative votes and one abstention, making it the first bill to be approved by the House in the 18th Congress.

The bill 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 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 be imposed every year on distilled spirits.

A P5 increase in the specific tax will then be imposed every year thereafter until it reaches P45 per liter in 2022.

From 2023 onwards, the specific tax for distilled spirits will climb 7 percent each year.

Meanwhile, HB 1026 also seeks to impose taxes on heated tobacco products and vapor products.

A tax of P45 per pack will be imposed on heated tobacco products by Jan. 1, 2020. 

For heated tobacco products, a tax of P45 per pack of 20 units or lesser will be imposed by Jan. 1, 2020, which will be increased by P5 every year thereafter until 2023.

The tax will then be increased by 5 percent every year starting Jan. 1, 2024.

For vapor products, a tax of P35 per milliliter of nicotine salt, or a fraction thereof, will be imposed by Jan. 1, 2020, to be increased by P5 every year until 2023.

The tax will increase by 5 percent every year thereafter.

Conventional “freebase” or “classic nicotine” will be imposed with a tax of P4.50 per milliliter or a fraction thereof by Jan. 1, 2020, which will be increased by P0.50 every year until 2023.

The tax will increase by 5 percent every year starting Jan. 1, 2024.

The bill was among the legislative measures specified by President Rodrigo Duterte as urgent during his Fourth State of the Nation Address last July.

It aims to generate revenue for the Duterte administration in implementing its priority projects to provide quality health care for Filipinos, while at the same time, discouraging Filipinos, most especially the youth, from getting hooked on smoking and binge drinking. 

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