Philippines Gets Christmas Tax Gift

December 21, 2012 Taxation in Philippines

excise duties on alcoholMANILLA – In an effort to increase health care funding and improve the lifestyles of nationals, the Philippines will hike the taxes levied on the sale of alcohol and tobacco in the country.

On December 20th the President of the Philippines Benigno Aquino signed the hotly debated and long discussed Republic Act 10351, which came to be known in the Philippines as the as the Sin Taxes, in order to allow tax authorities to raise the excise duties on all alcohol and tobacco products sold in the country.

The President described the development as an early Christmas gift which will free “more Filipinos from the vices of smoking and drinking.”

The excise taxes charged on the sale of tobacco and alcohol products will be increased next year, and further preset hikes will be enacted at the start of every following year until 2016, when the increases will be capped at 4 percent to match inflation.

The government currently expects to see total revenues from the excise taxes reach PHP 33.96 billion in 2013 alone, with nearly 70 percent of the revenues coming from taxation of the sale tobacco, and the remaining collections coming from the taxation of alcohol sales.

In an effort to any quell criticism of the rules set out in the bill, the President pointed out that the revenues raised through the increased taxes will be used to fund and launch new healthcare programs, to provide more support to existing healthcare facilities, and to subsidize tobacco growers in order to counteract some of the damage that the tax may have on the farming industry.

Photo by korpisto