Sin Tax Law
According to the Department of Health (DOH), almost 17.3 million Filipinos are tobacco consumers. About 1,073 cigarette sticks are consumed by Filipinos annually. This high consumption rate is seen as a result of low cigarette prices in the country. Smoking is seen as one of the primary factors responsible for 71 percent of lung cancer deaths in the world. According to DOH statistics, lung cancer is the leading form of cancer in the country, and that 10 Filipinos die every hour because of smoking. DOH also states that a 10 percent increase in tobacco taxes will reduce the number of smokers, which in turn will reduce the number of smoking-related illnesses and deaths.
Excessive alcohol drinking, on the other hand, may lead to: 1) vehicular accidents, 2.) fetal deformities, 3) violence/crime, 4) productivity losses, 5) suicide, 6) fires, and 7) accidental falls
The Department of Finance (DOF) determined the flaws in the current system of taxing “sin” products, as detailed by the following: * Under the Prize Classification Freeze, old brands are taxed differently from new ones. * Because of multi-tiered tax structure, smokers tend to prefer cheaper cigarette brands. According to the statistics provided by the Bureau of Internal Revenue (BIR), consumers downshifted from medium-priced cigarettes to low-priced cigarettes. In the case of alcohol, consumption of low-priced beers ballooned from less than 40% in 1994 to more than 70% in 2010. * As tax is affected by inflation, tax burden decreases due to lack of price indexation. * The country's taxation on distilled spirits is non-compliant with the World Trade Organization (WTO) rules.
Excise taxes of distilled spirits will be in accordance with their alcohol content. By January 2012, it will be P317.45 per proof liter; January 1, 2013, PHP 233.73 per proof liter; and January 1, 2014, PHP 150.00 per proof liter. On the years that will follow, excise tax rates will be adjusted to the present value using
Excessive alcohol drinking, on the other hand, may lead to: 1) vehicular accidents, 2.) fetal deformities, 3) violence/crime, 4) productivity losses, 5) suicide, 6) fires, and 7) accidental falls
The Department of Finance (DOF) determined the flaws in the current system of taxing “sin” products, as detailed by the following: * Under the Prize Classification Freeze, old brands are taxed differently from new ones. * Because of multi-tiered tax structure, smokers tend to prefer cheaper cigarette brands. According to the statistics provided by the Bureau of Internal Revenue (BIR), consumers downshifted from medium-priced cigarettes to low-priced cigarettes. In the case of alcohol, consumption of low-priced beers ballooned from less than 40% in 1994 to more than 70% in 2010. * As tax is affected by inflation, tax burden decreases due to lack of price indexation. * The country's taxation on distilled spirits is non-compliant with the World Trade Organization (WTO) rules.
Excise taxes of distilled spirits will be in accordance with their alcohol content. By January 2012, it will be P317.45 per proof liter; January 1, 2013, PHP 233.73 per proof liter; and January 1, 2014, PHP 150.00 per proof liter. On the years that will follow, excise tax rates will be adjusted to the present value using