The House of Representatives approved House Bill (HB) No.
1026 on Tuesday which seeks to increase excise tax rates products on alcohol,
heated tobacco and vapor products.
Alcoholic beverages such as beer, wine, or brandy will be taxed 22 percent of
the retail price and an additional specific tax of P35 per proof liter in 2020.
A 5-peso increase is added every year until it reaches up to P45 by 2022. A
specific tax of seven percent will be imposed each year afterwards.
The measure will slam an excise tax and specific tax of P696 per liter next
year on sparkling wines. The specific tax will also increase by seven percent
each year thereafter.
Meanwhile, an excise tax of 15 percent of the net retail price with a specific
tax of P60 per liter will be imposed on still wines and carbonated wines in
2020. The specific tax will eventually rise by seven percent every year and
will be effective by 2021.
Heated tobacco products shall now be levied with an excise tax rate of P45 per
pack next year, with a gradual increase of P5 until 2023. The tax imposed will
increase by another five percent each year after.
Vapor products and salt nicotine will have an excise tax of P30 per milliliter
in 2020, with an increase of P5 each year until 2023. It will grow by five percent
thereafter.
Meanwhile, the excise tax for conventional nicotine will be augmented to P4.50
per milliliter in 2022, with an incremental increase of P0.50 from 2021 up to
2023. It will rise by five percent each year afterwards.
Selling heated tobacco products and vapor products at
prices lower than the combined excise and value-added tax rates required will be
prohibited.
Violators shall be penalized with a fine or imprisonment in accordance with the
law.
The bill will also create a committee referred to as the Oversight Committee on Illicit Trade on Excisable Products, which shall be co-chaired by respective Chairpersons of the House and Senate Committees on Ways and Means.
The bill has to pass both chambers of the Congress before turning it over to the President for approval. Once the bill is signed by the President, only then can the implementation process of the signed bill (law) commence. (Congress/PN)
