Dominguez lauds 2nd reading approval of bill increasing taxes on alcohol, e-cigs

Finance Secretary Carlos Dominguez III has thanked the House of Representatives for approving on second reading one of the remaining packages of the Comprehensive Tax Reform program (CTRP)—the bill on higher excise taxes on alcohol products and electronic cigarettes—that President Duterte endorsed for congressional passage in his 4th State of the Nation Address (SONA) last month.

Dominguez also lauded the House committee on ways and means chaired by Albay Rep. Joey Salceda for its swift action on the bill, which cleared the way to its speedy approval at the plenary level after going through just a single panel hearing.

“We at the Department of Finance (DOF) laud the members of the House of Representatives, especially the ways and means panel and its chairman, Rep. Salceda, for the prompt action on the measure barely three weeks after President Duterte endorsed the approval of the rest of the CTRP packages in his fourth SONA last July 22,” Dominguez said.

He noted that higher revenues from CTRP reform measures will allow the government to fully implement President Duterte’s priority projects meant to bring about real change and better lives for the Filipino people.

Dominguez said the swift committee action on House Bill No. 1026 “augurs well” for the hoped-for closer coordination between Malacañang and lawmakers in the 18th Congress, as he expressed optimism that both the House of the Representatives and the Senate could give their final approval to this measure and the rest of the Palace-endorsed CTRP bills before yearend.

He expressed the hope, though, that the final version to be approved by both the House and the Senate would impose a higher tax rate of P40 per liter, as originally proposed by the DOF.

Forty-three (43) members of the House ways and means committee voted on Tuesday for HB 1026, which seeks to increase excise taxes on beer, spirits and wines. When the measure was opened for plenary debates on Wednesday, a bill in substitution of HB 1026 was introduced expanding its scope to include e-cigarettes such as heated tobacco and vapor (vaping) products.

According to Finance Undersecretary Karl Kendrick Chua, the House approval on 2nd reading of the measure imposing higher taxes on alcohol products and e-cigarettes keeps on track Salceda`s commitment for the approval by end-September of the tax reform packages now pending before the ways and means committee, so that these could all be passed by the plenary before the proposed 2020 national budget is tackled.

Dominguez said “higher taxes on ‘sin’ products like liquor and cigarettes will provide a steady revenue stream for the Duterte administration’s aggressive public investments in expanded social services like universal health care (UHC).

The version approved by the Salceda-chaired committee on alcohol excise tax increases was the same one passed on third and final reading by the House during the 17th Congress.

“As higher ‘sin’ taxes on alcohol and cigarette products enable the Duterte administration to raise to sufficient funds to implement its priority projects on providing quality health care for Filipinos, these revenue measures endorsed by the President at the same help discourage Filipinos, most especially the youth, from getting hooked on smoking and binge drinking,” Dominguez said.

Dominguez expressed the hope that “both the House and Senate could give their final approval to this bill and the rest of the CTRP packages before the year is over.”

“Higher revenues from tax measures will let the government maintain fiscal stability even as it goes ahead on its unprecedented, massive investment strategy to sustain high growth and attack poverty, create jobs and attract investments, and deliver better living standards and more opportunities for all Filipinos,” he said.

The House panel chaired by Salceda passed HB 1026 during the committee’s first hearing in the 18th Congress.

It was approved by 43 lawmaker-members upon the motion of Nueva Ecija Rep. Estrellita Suansing, who cited Rule 10, Section 48 of the House rules stating that: “In case of bills or resolutions that are identified as priority measures of the House, which were previously filed in the immediately preceding Congress and have already been approved on 3rd reading, the same may be disposed of as matters already reported upon the approval of majority of the Members of the committee present, there being a quorum.”

The other CTRP bills pending before the Salceda-chaired committee are the bill providing for a general tax amnesty along with the automatic exchange of information and lifting of bank secrecy in fraud cases; the bill establishing a fiscal regime for the mining industry; and the Passive Income and Financial Intermediaries Taxation Act (PIFITA).

The Salceda-chaired committee has already approved the second package of the CTRP, which is the Corporate Income Tax and Incentive Reform Act (CITIRA).