DOF studying tax for ‘alcopops’

By Chino S. Leyco

The Department of Finance (DOF) is studying the proposal to create a separate tax for light alcoholic flavored beverages that are becoming the preferred drinks of millennials.

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Finance Assistant Secretary Antonio Joselito G. Lambino II said they are looking at the possibility of separating the new alcoholic drinks commonly known as “alcopops” from distilled spirits under the government sin tax regime.

Lambino said the proposal on alcopop drinks was raised during a meeting of the DOF and the Department of Health (DOH) where they discussed their proposed measure for the 18th Congress that will raise the excise taxes on alcoholic beverages.

“We’re studying whether it should be part of the proposal or if we should maintain the status quo as these products are already being taxed as distilled spirits,” Lambino told reporters late Friday.

Currently, the national government imposes a 20 percent ad valorem tax on the net retail price per proof of distilled spirits and another P20 per proof liter specific tax.

Alcopops are ready-made carbonated and bottled alcoholic cocktails that are mainly mixtures of different types of spirits and liquors like vodka or rhum and flavoring.

Based on several researches, this new segment of alcoholic beverages is becoming popular among millennials, which is also eating up the market share of fermented drinks like beer in the local industry.

To recall, Finance Secretary Carlos G. Dominguez III said the DOF was keen on pushing the increase in excise tax rates on alcoholic beverages under the Duterte administration’s comprehensive tax reform program (CTRP).

In the 17th Congress, the DOF had proposed for an increase in the tax rates on all types of alcoholic beverages, including distilled spirits, wines, and fermented liquors.

However, the proposed higher taxes on alcoholic beverages was not included in the recently passed Senate bill 2233 that, once signed into law by President Duterte, will raise the excise levies on tobacco products including heat-not-burn, electronic and vape cigarettes.

Earlier, the DOF and DOH said the approval of higher excise taxes on tobacco products will provide the government with the necessary revenues to fully fund the universal health care (UHC), which will require as high as P1.44 trillion combined from 2020 to 2024.