Philippines: Wine Industry Rails Against Alcohol Tax
The wine industry is opposing the proposed alcohol taxes by the Philippine government claiming the measure to be “excessive”. The taxes are set to fund the universal healthcare programme of the country. But MPs have warned industry lobbyists against painting a false picture of the proposed alcohol tax increase, adding that it would instead help the funding gap in the Universal Health Care program implementation.
The Philippines adopted the Universal Health Care (UHC) Act into law earlier in 2019. But the first year of UHC was still lacking around P63 billion in order to be fully implemented.
To bridge this gap, an increase in tobacco taxes has already been adopted, expectedly generating around P15.7 billion in incremental revenue. The alcohol tax increases are set to close the funding gap.
Wine companies expressed opposition to the proposed tax hike on alcohol products, saying it was “excessive” that it would eventually kill the local industry. The industry argument is that the wine is made for everyday Filipinos and that they can not increase the price without having to close down completely.
Responding to the wine industry
In response to the complaints by the wine industry Finance Undersecretary Karl Chua said the House passed a “slightly more complicated” tax system on alcohol products. However, he said that the Department of Finance (DOF) is open to a simpler system and to increase the indexation of taxes from 4% to 10%.
Senator Pia Cayetano warned industry players against painting a false picture of the proposed alcohol tax increase, adding that it would instead help close the funding gap in the Universal Health Care program implementation.
When we’re talking about [taxing alcohol], please do not scare the people into thinking that what [the government is] trying to do is harmful to the Filipino people,” said Senator Pia Cayetano, as per Manila Standard.
The Senator also cited the calculations of the Department of Finance proposal to raise taxes on alcoholic beverages could raise around P33 billion in incremental revenue in its first year of implementation.
Senator Cayetano noted that, the country’s alcohol problem causes more damage to millions of Filipino families in terms of related diseases, road crashes, domestic abuse, and crimes, and therefore should be addressed through a variety of public health interventions and social reforms, including taxation.
Raising … taxes is a proven revenue- generating measure, and there is a need to address the current funding shortfall which amounts to P63 billion for the UHC law,” said Dr. Anthony Leachon, as per Manila Standard.
This, coupled with the cigarette tax increase passed last Congress will help bridge the gap, and we hope that our legislators take this into account when deliberating the proposal for higher taxes.”
Senator Cayetano and the panel conducted its second public hearing on Senate Bill No. 383 and House Bill No. 1026 – Increasing the Excise Tax Rates on Alcohol Products and E-Cigarettes on August 29, 2019.