Higher alcohol taxes eyed by 2020
The Finance department is looking to slap higher excise taxes on alcohol products beginning 2020.
Current tax bureau regulations call for a 4.0-percent annual increase in alcohol excise taxes beginning January 2018 while distilled spirits are also levied an additional ad valorem tax of 20 percent based on net retail price (NRP) per proof, excluding excise and value-added taxes.
Data obtained by reporters, however, show that the Finance department is considering a higher ad valorem tax of 25 percent for distilled spirits and a specific tax per proof liter of P40, P45, P50 and P55 in 2020, 2021, 2022 and 2023, respectively.
The same tax rates will apply to fermented liquor products, per liter of volume capacity, but without the ad valorem tax.
Sparkling wines or champagnes with an NRP of P500 or less per 750-ml bottle are planned to be taxed P334.59 in 2020, P368.04 in 2021, P404.85 in 2022 and P445.33 in 2023.
Excise tax rates for sparkling wines or champagnes with an NRP of more than P500 for the same volume capacity will be P936.82 in 2020, P1,030.50 in 2021, P1,133.55 in 2022 and P1,746.91 in 2023.
Over the same four-year period, an excise tax of P40.15, P44.17, P48.59 and P53.45 will be imposed on still and carbonated wines with 14 percent alcohol content or less.
The rates will be P80.31, P88.34, P97.17 and P106.89 for still and carbonated wines with more than 14 percent alcohol content but not more than 25 percent.
Still and carbonated wines with more than 25 percent alcohol content will be taxed as distilled spirits.
Lastly, the Finance department is also planning to increase excise tax rates on all alcohol products by 10 percent every year thereafter, with the ad valorem tax of 25 percent for distilled spirits to be maintained.
Higher alcohol products taxes have been proposed by the department under Package 2 Plus of the government’s Comprehensive Tax Reform Program. The proposal is pending at the House of Representatives.
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