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DoF upbeat over ‘sin’ tax hike version


THE Department of Finance (DoF) remains optimistic that its version of the proposed “sin” tax hike would still be adopted by the 18th Congress.

“There are so many steps to propose our version — the [House of Representatives] plenary, the Senate committee, the [Senate] plenary, the bicameral conference committee,” Finance
Undersecretary Karl Kendrick Chua told reporters late on Tuesday.

“So yes, we are very optimistic (to pass our proposed measures) as always,” he added.

His comment came after the House Ways and Committee on Ways and Means approved Albay Rep. Joey Salceda’s House Bill 1026, which seeks to increase the excise tax on alcohol products.
Salceda’s version involves a P30 per liter tax hike in alcohol products starting 2020, which would increase by P5 every year until it reaches P45 per liter in 2022.

“What they approved is a lower rate. What we proposed is P40 per liter (in the first year of implementation),” Chua said.

The estimated revenue in Salceda’s bill is also lower than the Finance department version, according to the official.

“The revenue difference is almost half. Our version is around P33 billion, while what they approved is around P15 billion,” he noted.

In the DoF’s version, dubbed Package 2 Plus B, the government could raise P24.7 billion from the higher excise tax on fermented beer, P400 million from alcopops, P8.2 billion from distilled spirits and P40 million from wines.

Besides the estimated tax take from alcohol, the department also expects an incremental revenue of P3.2 billion from electronic cigarettes (e-cigarettes) and vape products.

In total, measures under the Package 2 Plus B could add P36.54 billion to state revenues in their first year of implementation.

The initial revenue estimate from Package 2 Plus B is on top of the projected P15.5-billion tax take from Package 2 Plus A, or the recently passed Republic Act 11346, which imposes higher taxes on cigarettes and a new tax on e-cigarettes and other alternative devices for smoking.

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