President Duterte has signed the new sin tax reform law but vetoed a provision that prevents the government from conducting a raid on alcohol and tobacco facilities without a court order.
Republic Act No. 11467 seeks to increase the excise taxes on alcohol, heated tobacco, and vapor products mainly to generate funds for the government’s Universal Health Care program.
An “item veto,” however, was issued by the President after such provision supposedly curtails the search and seizure powers of the Bureau of Internal Revenue.
“I hereby register the item veto of Section 5 of the measure which was intended to further amend Section 152 of the NIRC (National Internal Revenue Code) as it effectively curtails the power of the State to collect taxes, and renders powerless the BIR to effectively implement enforcement mechanisms against illicit tobacco products,” the President’s said in his line-veto message to Congress leaders.
Duterte said the phrase “upon order of the court” unnecessarily requires the BIR to secure a court order before it can enter any house building or place where the sin products are produced or kept.
Under the Constitution, the President may veto particular items in an appropriation, revenue, or tariff bill, but the veto does not affect the item or items to which he does not object.
Under the new law, the government will impose a 22-percent ad valorem tax on top of the specific tax of P42 per proof liter for distilled spirits in 2020. It will be raised to P47, P52, P59, and P66 per proof liter from 2021 to 2024.
It will be increased by six percent every year effective 2025.
The excise tax on beer and fermented products will be P35 per liter for 2020, followed by a P2 increase every year until 2024. A six percent increase will be implemented in the succeeding years.
The government will also collect a specific tax of P50 per liter on all wines starting this year. It will have an annual increase of six percent every year. (Genalyn Kabiling)