Liquor maker Distileria Limtuaco & Co. Inc., the country's oldest distillery, is strongly supporting plans to rationalize the country’s excise tax scheme for sin products, particularly alcohol.
In a position paper submitted to the House of Representatives, Distileria president Olivia Limpe-Aw said a single tax rate should apply to all alcohol brands and that there should be no distinction between existing brands and variants of brands and new brands.
"We recommend the removal of the multilevel tax classification on alcohol products and to impose a single rate on similar products. In reality, it is very difficult for the BIR to capture the changes in the net retail prices of alcohol products which is currently the basis for the imposition of the excise tax," said Limpe-Aw.
She noted that a higher single excise tax rate should also be imposed on all imported distilled spirits and alcoholic beverages such as whisky, rum, gin, vodka, brandy, liqueurs and cordials. She stressed that this is the only way to protect the local industry.
Limpe-Aw pointed out that the duties slapped on imported spirits have been reduced to a minimal rate of five percent under the Asean Common Effective Preferential Tariff scheme.
According to her, legitimate importers would not oppose the higher excise tax rate as long as the government is able to plug the loopholes on parallel imports as well as rampant smuggling that result to unfair competition.
Limpe-Aw explained that the company would not oppose the proposed increase in excise tax rate on alcohol products that would result to a reduction in volume "as long as the Bureau of Internal Revenue is able to plug the loopholes and level the playing field."
"We have no major objection to an increase since it will apply to all," she said.
Established in 1852, Distileria Limtuaco produces whisky and brandy under the brands London Dry Gin, Rum, Vodka, cocktails, liqueurs and cordials.
Meanwhile, Finance Secretary Margarito Teves is set to ask Malacañang to certify as urgent the bill that would revise the excise tax on sin products such as tobacco and alcohol in order to raise extra revenues for the government's infrastructure and social services programs.
Senator Panfilo Lacson has filed Senate Bill No. 2980, a measure seeking a higher excise tax on sin products, which would raise between P89 billion and P112 billion over the first three years and between P60 billion and P70 billion annually starting the fourth year.