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Govt to push for higher sin taxes – Finance dept

July 22, 2019

THE government will push for new sin taxes at the 18th Congress, the Department of Finance (DoF) said over the weekend.

In a statement, the Finance department said key measures in the Duterte administration’s legislative agenda for this year’s Congress include “new excise taxes on alcohol, e-cigarettes and vapor (vaping) products.”

Finance Secretary Carlos Dominguez 3rd confirmed the statement, saying “the tax imposed is too low.”

“[The] target is to make it (tax) equivalent to [that for] cigarettes,” he added, referring to electronic and vapor cigarettes.

Alcohol products are displayed on the shelves of a convenience store in Intramuros, Manila, on Sunday. PHOTO BY J. GERARD SEGUIA

Introduced by the 17th Congress in June last year, e-cigarettes and vapor products would be subject to a P10 excise-tax rate per 10 milliliter beginning in January.

In contrast, ordinary cigarettes are subject to a higher P45 excise tax per pack next year, followed by a series of P5 hikes until the rate reaches P60 in 2023. This would be increased by 5 percent annually thereafter.

Given this, Dominguez said the government had deemed it ideal to propose a one-time increase in the excise taxes of e-cigarattes and vapor products.

According to him, the government is considering a P45 tax rate per ml for vapor products, but a discounted rate of P31.5 per ml will be implemented for the 0.7 ml pod.

For heated tobacco, the government will propose a P45-per-pack tax rate — the same as that imposed on regular cigarette packs.

“These rates are based on [the] equivalency of volume or heated pack to [a] regular pack of cigarettes,” Dominguez explained.

The government will also propose limiting the availability of e-cigarette/vape juice flavors to those similar to regular tobacco and menthol cigarettes.

“There is strong evidence suggesting that many other flavors tend to encourage initiation and heavy use among the young,” the Finance chief said.

On the alcohol tax, Dominguez did not elaborate, but earlier statements of the Finance department said it had proposed a tax of at least P40 per liter on alcoholic drinks under Package 2 Plus of the government’s Comprehensive Tax Reform Program.

Credit belongs to : www.manilatimes.net

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