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Senate chief says approval of higher ‘sin’ tax rates within the year ‘possible’
THE FINANCE CHIEF is pushing for approval of the measure increasing excise tax rates on alcohol and tobacco products, as well as e-cigarettes and vapor products before lawmakers go on their Christmas break — a timetable the Senate president said would be “possible” provided there is not too much divergence on rates between the House and the Senate versions.
“We hope that we can do it before yearend so that we can implement the law on January 1, (2020). If it is passed kasi after January, it’s very hard to implement the law midway in the year,” Finance Secretary Carlos G. Dominguez III told reporters on the sidelines of the budget hearing in the Senate on Tuesday.
Lawmakers, who returned to work on Nov. 4 from an Oct. 5-Nov. 3 break, will be taking their Christmas-New Year vacation on Dec. 21-Jan. 19, 2020.
“According to them, their schedule is two to two-and-a-half weeks for this (P4.1-trillion 2020 budget). That will leave us about three weeks for the [‘sin’ tax] bill and we said we really would appreciate it if they can pass it before the end of the year,” Mr. Dominguez said.
Sought for comment on approval within the year, Senate President Vicente C. Sotto III replied via mobile phone message: “It’s possible considering the certification of the President, but it will depend on the rates that will be acceptable to the members of the Senate.”
In a Nov. 12 letter to Mr. Sotto, President Rodrigo R. Duterte certified “the necessity of the immediate enactment” of Senate Bill No. 1074. In his letter, Mr. Duterte cited “the urgent need to generate additional revenue to support the effective implementation” of Republic Act No. 11223, or the Universal Health Care Act which he signed into law on Feb. 20, and which the Finance department estimates has a P63-billion funding gap in its first year of implementation. The department projects that the Senate version will generate P47.9 billion in 2020 and a total of P356.9 billion over five years.
With the certification removing the rule on three-day separation between second and third-reading approval, the bill can now be passed on the same day.
Mr. Dominguez added that Bureau of Internal Revenue has started drafting the prospective law’s implementing rules and regulations in order to ensure prompt implementation.
The House of Representatives approved its own version, House Bill No. 1026, on Aug. 20. The Finance department estimates that HB 1026 will yield collections amounting to P16.3 billion in 2020 and a total of P108.9 billion within five years.
The measure is part of the Duterte administration’s comprehensive tax reform program that is yet to be passed by the Congress, along with reforms reducing corporate income tax while rationalizing fiscal incentives; centralizing real property valuation and assessment; and simplifying the tax structure for financial investments.
Among the measures that were already passed are Republic Act (RA) No. 11346 which raised the excise tax on tobacco products, RA No. 10963 which slashed personal income tax rates but imposed higher or new taxes on several goods and services, and RA 11213 or the Tax Amnesty Act which granted an estate tax amnesty on delinquent accounts. — Beatrice M. Laforga