House approves tax rate hike on alcoholic products on second reading

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Metro Manila (CNN Philippines, August 14) – The House Committee on Ways and Means on Wednesday passed on second reading a bill which seeks to increase the tax rates on alcoholic products.

The panel, chaired by Albay 2nd District Representative Jose Maria S. Salceda, approved House Bill 1026 Tuesday, which now includes provisions to impose higher duties on heated tobacco and vaping products, including nicotine salt and conventional freebase or classic nicotine.

The proposed act proposes a 22-percent excise tax on the net retail price of the alcoholic beverage and a specific tax of P35 per proof liter starting January 1, 2020, with an annual 7-percent increase in subsequent years starting 2023.

If passed, the tax per proof liter will be higher by ₱40 in 2021, while tobacco products by ₱45 per 20-unit pack beginning January 1, 2020, with ₱5 increments annually. By 2024, the measure proposes to levy a 5-percent tax increase each succeeding year.

Meanwhile, vaping products will be taxed 30 pesos per milliliter or a fraction thereof next year. By 2023, the amount may reach ₱45, followed by an annual 5-percent tax hike beginning 2024.

In July, President Rodrigo Duterte approved Republic Act 11346, a law which will increase the tax on cigarettes to ₱45 per pack by next year.