Alcohol tax to raise P237B in 5 years

March 12, 2019
Wine - Beverages

A proposal by Senator Emmanuel Pacquiao to increase the excise tax on alcohol products will raise additional revenues of almost PHP237 billion over a five-year period and at the same time help reduce excessive consumption of alcoholic drinks or binge drinking that is linked to vehicular crash accidents, domestic abuse and other crimes.

Finance Undersecretary Karl Kendrick Chua said in a statement on Monday that like the proposed hike in cigarette taxes, increasing the excise tax levied on alcohol products will help close the PHP40-billion funding gap in the universal health care (UHC) program.

Pacquiao's Senate Bill (SB) No. 2197 will raise around PHP32.3 billion in the first year of its implementation in 2019, PHP40 billion in 2020, PHP47.4 billion in 2021, PHP54.6 billion in 2022 and PHP62.4 billion in 2023, for a total of PHP236.6 billion, Chua said.

In endorsing the senator's bill, Chua said computations done by the DOF's Strategy, Economics and Results Group (SERG) show that the inflationary impact of increasing the excise tax on alcohol products under the measure would only be 0.1 percentage points.

“If inflation is, let’s say, 3.2 percent this year as the Bangko Sentral ng Pilipinas (BSP) projects, then the additional inflation will be 0.1, so 3.3 percent,” Chua said during a recent hearing conducted by the Senate ways and means committee on the proposal to increase alcohol excise taxes.

Meantime, Health Undersecretary Rolando Domingo said at the same Senate hearing held before the adjournment of session last month that higher alcohol excise taxes would help curb binge drinking, which often leads to vehicular accidents and the commission of crimes.