Higher taxes sought on e-cigarettes, beer and liquor


Posted at Jul 24 2019 04:07 PM | Updated as of Jul 24 2019 05:35 PM

MANILA - The government aims to further raise taxes on e-cigarettes, vaping products, as well as beer and hard liquor to fill the projected shortfall in funding for the Universal Healthcare Law, an official of the Finance Department said Wednesday. 

Recent increases in the tobacco excise tax passed by Congress are still not enough to fund universal healthcare, said Finance Undersecretary Karl Chua.

"Ang problema po natin, bago naipasa po yung tobacco excise tax in the last Congress, ay mayroon po tayong P195 billion na guaranteed fund for universal healthcare [for 2020]. Ang kulang po natin yung P62 billion," Chua said in a press briefing in Malacañang. 

(Our problem is that before the excise tax bill bill was passed in the last Congress, we had a guaranteed fund of P195 billion for universal healthcare [for 2020]. We have a shortfall of P62 billion.)


The funding gap could reach P400 billion from 2020 to 2024, Chua said. 

To make up for this shortfall, the government wants to raise the excise taxes on e-cigarettes, vaping products and heated tobacco products to P45 per 10 milliliters from the P10/ml approved by Congress. 

This hike would bring the tax rate on e-cigarettes and vaping products at par with the duties on regular cigarettes in the bill passed by the 17th Congress. 

Higher taxes will also be slapped on beer. From the current P24 to P34 per liter, the excise tax will be raised to P45 per liter by 2021. This will be increased by another P5 in succeeding years until it reaches P60.50 in 2024 with 10-percent increases each year. 

Taxes on distilled spirits or hard liquor will also be hiked. The ad valorem tax rate on these drinks will be raised to 25 percent from 20 percent, while the specific tax rate will increase to P40 per liter from the current P23.

Chua said the specific tax would also be increased each year until it reaches P55 per liter. 

Camarines Sur Representative LRay Villafuerte has filed the bill on these tax hikes, said Chua.

The amendments to the sin tax law passed by the 17th Congress is still awaiting President Rodrigo Duterte's signature. 

The enrolled bill already hikes excise taxes on cigarettes to P45 per pack by 2020, P50 per pack by 2021, P55 per pack by 2022, and P60 per pack by 2023.

Senator Imee Marcos on Monday opposed Duterte’s call to further increase taxes on tobacco.

In his fourth State of the Nation Address, Duterte joked that smokers should be exterminated.