House OKs tax hike on alcoholic beverages, vapes

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Metro Manila (CNN Philippines, August 20) — Voting 184 in favor, two against and with one abstention, the House of Representatives approved on final reading a bill that seeks to increase taxes on alcoholic beverages and impose new taxes on e-cigarettes and vapes.

This is the first bill approved by the House in the 18th Congress. The measure was approved on second reading last week.

A similar proposal is pending in the committee in the Senate.

The proposed act suggests 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 increase 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.

President Rodrigo Duterte approved a law last month which increased taxes on cigarettes to ₱45 per pack by next year. This is on top of a tax hike on tobacco and alcohol that Duterte also approved in January.

Further increasing levies on tobacco and alcohol is among the measures Duterte pitched to Congress during his fourth State of the Nation Address.

The government, with these taxes, is looking to fund the implementation of the Universal Health Care law, which aims to provide health insurance coverage for all Filipinos.

CNN Philippines Correspondent Xianne Arcangel contributed to this report.