THE alcoholic beverage industry is looking at the possibility of simplifying the tax structure for wines and spirits in line with the overhauling of the tax system on sin products.
“There can be changes in the structures, because it’s hard to calculate based on net retail price. Maybe, the simplification of the tax?” Olivia Limpe-Aw, president of the country’s oldest distillery Destileria Limtuaco & Co. Inc., said over the weekend.
“As a group we’re still studying what we would like to propose. We’re looking into simplification,” she said during the press conference of the Global Peace Foundation (GPC) at the Chamber of Commerce of the Philippine islands.
“We don’t really have an industry position yet. The specific tax is okay, but the ad valorem on the net retail price is something new. It’s like, the higher you go, the higher the prices—it doesn’t contribute to your bottom line, so it’s like the rate of margin is constant,” Limpe-Aw said.
On distilled spirits, the specific tax is based on a unit of measure as in proof per liter multiplied by the volume. So if the bottle is 750 milliliter times 0.75, then that is the amount of tax.
Limpe-Aw noted that the market has remained more or less flat around 66 million cases since 2013.