Vapes, liquor, soft drinks could face higher taxes in the Philippines
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The move seeks to more than offset losses from Philippine President Ferdinand Marcos Jr’s pro-consumer measures.
PHOTO: REUTERS
- The Philippines plans to raise taxes on sugary drinks, e-cigarettes, alcohol, and luxury goods to offset revenue losses from new pro-consumer tax relief measures.
- The Finance Department expects an average annual revenue gain of 48 billion pesos over four years from these tax increases.
- Additional proposals include taxes on private jets, plastics, and higher excise taxes on automobiles to support fiscal health amid economic challenges.
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MANILA – The Philippines wants to impose higher taxes on products that cause health problems, including soft drinks, e-cigarettes and alcohol, to more than offset losses from President Ferdinand Marcos Jr’s pro-consumer measures.
Department of Finance officials, in a congressional hearing on Aug 4, pitched an increase in levies on sugary drinks and new taxes on ice cream and natural fruit juices. They are also seeking higher taxes on vapour products, e-cigarette devices and distilled spirits.
The measures are intended to regain revenue that will be lost from Marcos’ pro-consumer proposals, which include raising the ceiling for take-home pay that the government does not tax.
The Finance Department expects an average revenue gain of 48 billion pesos (S$1 billion) annually in the next four years from the proposed tax measures after deducting losses from tax relief, Undersecretary Karlo Adriano told lawmakers during the Aug 4 hearing.
Marcos is championing relief measures as households that power the consumption-driven economy reel from high prices of goods due to energy disruptions caused by the Iran war. Debt watchers earlier warned of risks to the nation’s fiscal health if these measures do not come with revenue-positive proposals.
The government is also considering an increase in the tax rate for luxury goods from 20 per cent to 25 per cent, and imposing levies on private jets. It also proposed taxes on plastics and a higher excise tax on cars.
Proposed revenue-eroding measures will likely lead to 81.7 billion pesos in annual forgone revenue, but the push for higher taxes on sugary drinks, liquor and luxury items would yield as much as 130 billion pesos, according to Finance Department estimates. BLOOMBERG
