Author Topic: Speech of Senate Ways and Means Committee Chair Pia S. CayetanoOn the Bicameral Conference Committee  (Read 205 times)

jackielynjandayan

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Mr. President, as Chairperson of the Senate contingent to the bicameral conference committee that discussed the proposed sin tax reform measure, I now have the privilege to report to you the approved bicam version of our bill.

These are now the rates that the bicam committee adopted:

For fermented liquor, the specific tax rates will be raised to P35 in 2020, P37 in 2021, P39 in 2022, P41 in 2023, and P43 in 2024, with a 6 percent indexation in the following years.

For distilled spirits, the specific tax rates will be raised to P42 in 2020, P47 in 2021, P52 in 2022, P59 in 2023, and P66 in 2024, with a 6 percent indexation in the following years. There will also be an ad valorem tax rate of 22 percent beginning next year.

For sparkling and still wines, the fixed tax rate will be P50, with a 6 percent indexation in the following years.

For heated tobacco products or HTPs, the tax rate will be P25 in 2020, P27.50 in 2021, P30 in 2022, and P32.50 in 2023, with a 5 percent indexation in the following years.

For salt nicotine, the tax rate will be P37 in 2020, P42 in 2021, P47 in 2022, P52 in 2023, with a 5 percent indexation in the following years.

For free base vape products, the tax rate will be P45 in 2020, P50 in 2021, P55 in 2022, P60 in 2023, with a 5 percent indexation in the following years.

These rates are expected to generate P22.2 billion worth of revenues from alcohol and ecigs during the first year of implementation, minus the VAT exemption on specific prescription medicines (P5.2 billion), which will bring the net incremental revenues from the measure to P17.1 billion.

Mr. President, I would like to put on record that as Chair of the Senate Ways and Means Committee, I had pushed for substantially higher sin tax rates under our Committee Report to meet the funding requirements for universal health care. Moreover, it is my firm belief that taxation can be an effective tool to deter the consumption of products that are deemed harmful to our people's health. All this, while balancing the interests of the various industries involved.

But we also recognize that as a bicameral body, Congress works on the principles of fair, democratic deliberations and consensus building. Having said this, I thank my fellow legislators for their input and cooperation, which will now pave the way for the ratification of this meaningful measure. I remain confident that, albeit lower than what we originally proposed, the revenues to be generated under this sin tax measure would go a long way in protecting our people's health and welfare.

Note: As manifested on the floor, the speech has been inserted into the Senate records



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