House committee approves sin tax bill

By Nephele Fabiola S. Kirong

Wednesday 9th of May 2012

QUEZON CITY, May 9 (PIA) -- The Committee of Ways and Means of the House of Representatives today approved an amended version of House Bill 5727 (HB 5727), or the excise tax reform bill with 46 votes in favor and 14 against.

The substitute ‘sin tax’ bill, which was presented by the Department of Finance and was based on consultation with industry stakeholders, changed the original unitary taxing system to a multi-tiered one.

For distilled spirits and fermented liquor, a three-tier tax rate based on the net retail price (NRP) per bottle of 750 ml and per liter of volume capacity respectively, was proposed.

On the other hand, a two-tier tax structure based on NRP below and above P11.50 was introduced for cigarettes.

Both will have indexation at eight percent for every two years, effective January 1, 2015 until January 1, 2025.

The bill’s principal proponent Cavite Rep. Joseph Emilio Abaya also expressed his agreement to amend the bill.

The HB 5727 is a priority measure by the administration of President Benigno Aquino III. It aims to rationalize taxes on liquor and tobacco products. Once signed into law, the revenue generated is intended to fund the universal healthcare program of the government. (NFK/PIA-GHQ)