First tax reform bill hurdles House panel

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THE House Committee on Ways and Means on Tuesday approved a bill increasing taxes on alcoholic beverages, making it the first tax reform measure to gain such approval in the 18th Congress.

House Bill 1026 filed by committee chair and Albay 2nd district Rep. Jose Maria S. Salceda aims to increase the excise tax rates on alcoholic beverages products with annual increases of 7% in subsequent years.

The bill’s progress was expedited due to House Rule 10, which requires only one hearing for bills approved on third reading in the previous sitting of Congress.

“I invoke Rule 10 Sec. 48 of our rules and move that the measure be disposed as of matter already reported,” said Nueva Ecija 1st district Rep. Estrellita B. Suansing, who is the committee’s vice-chairperson.

The measure proposes increased excise taxes on distilled spirits to 22% from 20%, an ad valorem tax on the net retail price (NRP) per proof and a specific tax of P30 per liter from P23.40 in 2019. The specific tax rate will then be increased by P5 every year, until it reaches P45 in 2022, after which it will increase by 7% annually beginning 2023.

The measure will also levy on sparkling wines a 15% ad valorem tax per liter, which is not imposed under the present system; in addition to a P650 specific tax per liter in 2020, which is to increase by 7% annually.

Meanwhile, cooking wines with salt content of not less than 1.5 grams for every 100 milliliters are exempt from excise tax.

A similar bill was approved on third and final reading by the House in the 17th Congress, but it did not make similar progress in the Senate.

Cagayan de Oro 2nd district Rep. Rufus B. Rodriguez objected to Ms. Suansing’s motion, saying that legislators who were not part of the 17th Congress should be given the chance to review the bill.

“It should be equitable to me and other new members of this Congress who were not present in the former deliberations”

According to the data presented by the Ways and Means Committee, the revenue estimates for 2020 of the 17th Congress approved version on alcohol taxes is P15.6 billion, along with P10.3 billion in estimated revenue for fermented liquors, P5.2 billion for distilled spirits, and P100 million for wines.

Recently, Finance Undersecretary Karl Kendrick T. Chua said that the expected revenue from raising taxes from alcoholic beverages is P33 billion in the first year of implementation. — Vince Angelo C. Ferreras