Philippines raises taxes for alcopops to curb binge drinking

The Philippines Government plans to increase alcopop tax to generate additional revenue and discourage binge drinking.

Alcopops are flavoured drinks with low-alcohol content that are available in convenience stores and small retailers.

Finance assistant secretary Antonio Joselito Lambino II told the media: “We are studying whether it should be part of the proposal or if we should maintain the status quo as these products are already being taxed as distilled spirits.”

At a recent meeting, the Department of Finance (DOF) and the Department of Health (DOH) discussed the emergence of alcopops and a proposal for the 18th Congress to create a separate tax for the beverages.

The government currently imposes a 20% ad valorem tax on the net retail price per proof of distilled spirits and another PHP20 per proof litre-specific tax.

According to a report in 2012, alcopops are being sold under ten brand names in the country.

The finance assistant secretary added that increasing excise duty on alcopops will make them more expensive and help lessen binge drinking.

In May, finance secretary Carlos Dominguez III said that while the Sin Tax Reform Law of 2012 has been effective in reducing smoking, it failed to curb drinking. The Department of Finance is keen to increase the excise tax on alcoholic beverages under the Duterte administration’s Comprehensive Tax Reform Program (CTRP).

Even though the DOF proposed a rise in tax on all types of alcoholic beverages, a proposal on higher taxes was not included in the recently passed Senate Bill 2233.

The latest proposal will increase excise levies on beverages such as distilled spirits, wines and fermented liquors, as well as tobacco products, including heat-not-burn, electronic and vape cigarettes.

The DOF and DOH said that higher excise taxes on tobacco products will fetch the government revenues to fund the Universal Health Care (UHC), which will require PHP1.44tn ($28.2bn) combined from 2020 to 2024.