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Gov’t told to fight illicit alcohol trade before mulling tax hike

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DES RÉCITS-UNSPLASH

THE GOVERNMENT should improve efforts against the illicit trade of alcoholic drinks before considering an increase in ‘sin taxes,’ a congressman said on Tuesday.

Increasing taxes could spur an uptick in the illicit alcohol trade including smuggling, similar to what is happening to the illegal cigarette trade, Albay Rep. Jose Ma. Clemente S. Salceda said in a statement.

“I’m all for increased tax rates on alcohol,” the head of the House of Representatives ways and means committee said. “It’s still far too cheap that it allows binge drinking. I am alarmed, however, by the prevalence of illicit trade in alcohol and tobacco.”

The National Government has lost about P221 billion in revenues since 2021 because of illegal cigarettes, Mr. Salceda said.

The thriving tobacco black market has led to declining tax collections despite high tax rates on the cigarette industry, he pointed out.

The Philippines applies an excise tax of P60 per pack of 20 cigarettes, while vape products are levied P54.60 per milliliter for salt nicotine and P63 per 10ml tax for classic nicotine products, based on the excise tax rates prescribed by the Bureau of Customs.

“Tobacco excise tax revenues have been declining despite higher tax rates, so something is up, and we can’t simply ignore it,” Mr. Salceda said.

He said his committee would look into the practices and protocols of the Bureau of Customs regarding alcoholic drinks before an across-the-board increase in tax rates.

Distilled alcoholic beverages such as brandy and rum are taxed P63 per liter, while fermented liquors such as beer are levied P43 per liter and P63.12 per liter for wine products.

“Because legal alcohol has become too expensive for the legal market, we really need to deal with the illicit trade,” Mr. Salceda said.

“That’s the policy balance I’m working with — not an argument against higher rates but an argument for better enforcement alongside higher rates,” he added. — Kenneth Christiane L. Basilio

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