Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

Nineteenth Congress
First Regular Session x
-

Sno ex se
House Bil] No. 1810

Introduced by Representative JOEY SARTE SALCEDA

AN ACT
INCREASING THE EXCISE TAX ON PRE-MIXED ALCOHOLIC BEVERAGES,
AMENDING FOR THIS PURPOSE SECTIONS 143 OF THE NATIONAL
INTERNAL REVENUE CODE OF 1997, AS AMENDED,
AND FOR OTHER PURPOSES

EXPLANATORY NOTE

Mortality indicators of the World Health Organization show the detrimental use of
alcohol results in three (3) million deaths annually. There are 230 different types of diseases
where alcohol has a significant role in addition to its harmful effect on the well-being and
health of people around the drinker. By 2018, the worldwide total consumption was equal to
6.2 liters of pure alcohol per person 15 years and older. Unrecorded consumption accounts for
26% of the worldwide total consumption.'

In the Philippines. the 2021 Department of Health’s mobile phone health survey on
non-communicable diseases (NCD) risk factors showed high alcohol consumption with four
(4) in ten Filipinos reporting episodic drinking 30 days prior to the survey. Alcohol use was
higher in men compared to women, with 51.4% of men and 28.9% of women reporting current
drinking use. One (1) in three (3) adult Filipinos (33.1%) reported drinking six or more drinks
on a single drinking occasion while men reported higher rates of heavy drinking occasions
compared to women at 43.2 % and 22.9% respectively?

The enactment of sin tax laws since 2012 resulted in significant fiscal, and given the
carmarking provision. public health improvements. The increase in tax revenues improved
allocation for premium subsidies for the health insurance of indigents and senior citizens not
covered by the National Health Insurance Program. To continue the financial sustainability of
health expenditure programs and support positive health outcomes, Republic Act No. 11467
amended Republic Act 10351. further increasing the tax rates on alcohol products.

+ World Health Organization ~ Global Information System on Alcohol and Health
2 Department of Health - Non-communicable Disease Mobile Phone Survey 2021

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‘The corresponding adjustment of alcohol excise rates by January 27, 2020. following
the Revenue Regulation pursuant to Republic Act No. 11467, softened the impact of the
coronavirus pandemic to excise tax collections. The revenue from excise tax increased by 1%
in 2020 in contrast to total government revenue which declined by 11% in 2020. The minimal
impact on alcohol excise tax receipts is primarily attributed to the increase in domestic distilled
spirits consumption, offsetting the decline in beer consumption, the dominant market
commodity in terms of volume and value in the Philippines?

This bill seeks to adjust the excise tax rates on pre-mixed alcoholic beverages similar
to beer. given similar consumption patterns. Currently classified under distilled spirits and
taxed with rates of 22% ad valorem tax plus a specific tax rate of P52.00. pre-mixed alcoholic
beverages will be reclassified and taxed as fermented liquors that will include flavored
beverages sold as being ready to consume. with an alcohol content of not more than ten percent
(10%), and made by combining an alcoholic product such as fermented liquor. distilled spirit.
wine or other alcoholic beverage with non-alcoholic ingredients.

The enactment of this measure will contribute to reducing the burden of the harmful
use of alcohol, Other health, safety, and socioeconomic problems attributable to alcohol will
likewise be addressed with the implementation of this measure.

In view of the foregoing, the passage of the bill is earnest);

Il, Richard and Magallon, Jorge. Diageo Philippines. Modelling the impact of excise rate changes on
government revenue and alcohol volume

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
Nineteenth Congress
First Regular Session

House Bill No. 1810

Introduced by Representative JOEY SARTE SALCEDA.

AN ACT
INCREASING THE EXCISE TAX ON PRE-MIXED ALCOHOLIC BEVERAGES,
AMENDING FOR THIS PURPOSE SECTIONS 143 OF THE NATIONAL
INTERNAL REVENUE CODE OF 1997, AS AMENDED,
AND FOR OTHER PURPOSES

Be it enacted by the Senate and the House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Section 143 of the National Internal Revenue Code, as amended, is hereby
further amended to read as follows:

“SEC. 143. PRE-MIXED ALCOHOLIC BEVERAGES AND
Fermented Liquors. There shall be levied, assessed and collected an excise tax
on PRE-MIXED ALCOHOLIC BEVERAGES, beer, lager beer, ale, porter and
other fermented liquors regardless if manufactured in factories or sold and
brewed at micro-breweries or small establishments such as pubs and
restaurants, except uba, basi, tapuy and similar fermented liquors in
accordance with the following schedule:

“XXX

“The rates of tax imposed under this Section shall be increased by six
percent (6%) every year thereafter effective January 1, 2025, through revenue
regulations issued by the Secretary of Finance.

“PRE-MIXED ALCOHOLIC BEVERAFES SUCH AS BUT NOT
LIMITED TO ‘ALCOPOPS,’ ‘ALCOMIXES', ‘COOLERS’, ‘SPIRIT
COOLERS’, ‘WINE COOLERS’, ‘CRUISERS’, AND ‘BREEZERS’ SHALL
MEAN FLAVORED BEVERAGES SOLD AS BEING READY TO
CONSUME, WITH AN ALCOHOL CONTENT OF NOT MORE THAN TEN
PERCENT (10%), AND MADE BY COMBINING AN ALCOHOLIC
PRODUCT SUCH AS FERMENTED LIQUOR, DISTILLED SPIRIT, WINE,
OR OTHER ALCOHOLIC BEVERAGE WITH NON-ALCOHOLIC
INGREDIENTS SUCH AS BUT NOT LIMITED TO FRUIT JUICE, CREAM,

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CARBONATED WATER, AND SYRUP. PRE-MIXED ALCOHOLIC
BEVERAGES SHALL BE TAXED AS FERMENTED LIQUOR.

“Every brewer. manufacturer or importer of PRE-MIXED
ALCOHOLIC BEVERAGES OR fermented liquor shall. within thirty (30)
days from the effectivity of this Act, and within the first five (5) days of every
month thereafter. submit to the Commissioner a sworn statement of the volume
of sales and removals for each particular brand of PRE-MIXED ALCOHOLIC
BEVERAGES OR fermented liquor sold at his establishment for the three-
month period immediately preceding.

“Any brewer, manufacturer or importer who, in violation of this
Section, misdeclares or misrepresents in his or its sworn statement herein
required any pertinent data or information shall. upon final findings by the
Commissioner that the violation was committed, be penalized by a summary
cancellation or withdrawal of his or its permit to engage in business as brewer.
manufacturer or importer of PRE-MIXED ALCOHOLIC BEVERAGES OR
fermented liquor.

“XXX

SEC. 2. Implementing Rules and Regulations. ~ Within ninety (90) days from the
effectivity of this Act, the Department of Finance and the Department of Health shall issue the
tules and regulations for the effective implementation of this Act.

SEC. 3. Repealing Clause. ~ All laws, decrees, executive orders, rules, and regulations.
and other issuances or parts thereof, which are inconsistent with the provisions of this Act, are
hereby repealed, amended or otherwise modified accordingly.

SEC. 4. Separability Clause. ~ If any provision of this Act is declared invalid or
unconstitutional. the remaining provisions hereof which are not affected shall remain in full
force and effect.

SEC. 5. Effectivity. - This Act shall take effect fifteen (15) days following its
publication in the Official Gazette or in at least one (1) newspaper of general circulation

Approved,

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