GEPRES,
ox “aN
iw yy

RECEIVED
20 AUG 2005

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

TWENTIETH CONGRESS
First Regular Session

HOUSE BILL No. 3887

Introduced by REP. NATHANIEL “Atty. Nat” M. ODUCADO

EXPLANATORY NOTE

The World Health Organization (WHO) recognizes alcohol use as one of the leading
causes of death and disease globally. In 2019, around 2.4 million deaths worldwide were caused
by alcohol use. Of those deaths, nearly 40,000 were Filipinos.

In the Philippines, 60.3% of adults are current alcohol drinkers, according to the DOST-
FNRI 2023 National Nutrition Survey. 51.8% of adolescent alcohol users and 58.7% of adult
alcohol users binge drink, a figure which has remained stagnant over the past decade. Other
undesirable consequences of alcohol use include non-communicable diseases, domestic
violence, road traffic crashes, and mental illnesses. Taken altogether, the burden of alcohol
consumption adds up to billions of pesos in direct costs and indirect costs such as lost
productivity from sickness and premature deaths.

With the WHO declaration that no amount of alcohol is safe for our health, there is a
need to steer the Filipino people to healthier lifestyle changes. Alarmingly, there has been
studies that shows the second largest consumers of alcohol in the country are aged 15-19 years
old.' Alcohol in the country is cheap and easily accessed by everyone. Countries around the
world, guided by the World Health Organization, have proven that higher taxes save lives—
and the Philippines should not be left behind?

‘This proposal for an across-the-board increase in alcohol taxes is expected to generate
at least Php 200 billion in incremental revenue for the next six (6) years. Increasing taxes on
alcohol in the Philippines will also generate additional revenue for Universal Health Care.

Public support is already strong. Recent national surveys indicate that about two-thirds
of Filipinos (67%) favor higher excise taxes on alcohol.* The fact that the majority of Filipinos

" Cabato, Luisa. “ Group calls for 6.5% yearly alcohol price hike to cut consumption” last accessed at
https://newsinfo inquirer.nev/195947 l/group-calls-for-6-5-yearly-alcohol-price-hike-to-cut-consumption

2 World Health Organization, (2020). Alcohol taxation: An underused public health strategy. Geneva: WHO.
Retrieved from https://www.who. int/publications/i/item/9789240011328

Midatl.



favor stronger alcohol taxation—even when it directly affects consumer prices—shows that the
public recognizes the urgency of the problem.

Raising alcohol taxes is not just about money—it's about life, health, and the future of
our nation. Every peso added to the price of alcohol could mean one less hospital bed filled,
one less funeral to attend, one less child growing up without a parent. If we truly value the
health and safety of Filipinos, then we must say yes to higher alcohol taxes—because the cost
of inaction is far greater.

(ATHA!

EL “ATTY. NAT: eae ODUS ADO



®@ aawo no

Seo wx

12
13

14
15

16

7
18

19

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

TWENTIETH CONGRESS
First Regular Session

HOUSE BILL No. 3887

Introduced by REP. NATHANIEL “ATTY. NAT” M. ODUCADO

AN ACT
INCREASING THE EXCISE TAX ON ALCOHOLIC BEVERAGES, AMENDING
FOR THIS PURPOSE SECTIONS 141, 142, 143, and 8 OF THE NATIONAL:
INTERNAL REVENUE CODE OF 1997, AS AMENDED, AND FOR OTHER:
PURPOSES

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

SECTION 1. Section 141 of the National Internal Revenue Code, as amended, is
hereby further amended to read as follows:

“SEC. 141. Distilled Spirits. - On distilled spirits, subject to the provisions of
Section 133 of this Code, an excise tax shall be levied, assessed, and collected based
on the following schedules:

“(A) Effective January 1, 2027

“(1) An ad valorem tax equivalent to twenty-two percent (22%) of the net retail
price (excluding the excise tax and the value-added tax) per proof; and

“(2) In addition to the ad valorem tax herein imposed, a specific tax of EIGHTY
ONE PESOS (P81.00) per proof liter.

"(B) Effective January 1, 2028

“(1) An ad valorem tax equivalent to twenty-two percent (22%) of the net retail
price (excluding the excise tax and the value-added tax) per proof; and

*(2) In addition to the ad valorem tax herein imposed, a specific tax of NINETY
THREE PESOS (P93.00) per proof liter.

“(C) Effective January 1, 2029

“(1) An ad valorem tax equivalent to twenty-two percent (22%) of the net retail
price (excluding the excise tax and the value-added tax) per proof, and

“(2) In addition to the ad valorem tax herein imposed, a specific tax of ONE
HUNDRED SIX PESOS (P106.00) per proof liter.


2 ar on

25
27

28
29

“(D) Effective January 1, 2030

“(1) An ad valorem tax equivalent to twenty-two percent (22%) of the net retail
price (excluding the excise tax and the value-added tax) per proof; and

*(2) In addition to the ad valorem tax herein imposed, a specific tax of ONE
HUNDRED TWENTY TWO PESOS (P122.00) per proof liter.

“(E) Effective January 1, 2031

“(1) An ad valorem tax equivalent to twenty-two percent (22%) of the net retail
price (excluding the excise tax and the value-added tax) per proof; and

“(2) In addition to the ad valorem tax herein imposed, a specific tax of ONE
HUNDRED FORTY ONE PESOS (P141.00) per proof liter.

“(F) Effective January 1, 2032

“(1) An ad valorem tax equivalent to twenty-two percent (22%) of the net retail
price (excluding the excise tax and the value-added tax) per proof, and

"(2) In addition to the ad valorem tax herein imposed, a specific tax of ONE
HUNDRED SIXTY TWO PESOS (P162.00) per proof liter.

*(G) In addition to the ad valorem tax herein imposed, the specific tax imposed
under this Section shall be increased by six percent (6%) every year thereafter,
effective January 1, 2033, through revenue regulations to be issued by the Secretary
of Finance.

XXX

Any person liable for any of the acts or omissions prohibited under this Section
shall be criminally liable and penalized under Section 254 of this Code. Any person
who willfully aids or abets in the commission of any such act or omission shall be
criminally liable in the same manner as the principal.

SELLING DISTILLED SPIRITS TO PERSONS BELOW EIGHTEEN (18)
YEARS OLD SHALL BE PROHIBITED, AND SHALL BE PUNISHED WITH A FINE
OF FIFTY THOUSAND PESOS (P50,000.00) AND IMPRISONMENT OF (30) DAYS.

If the offender is not a citizen of the Philippines, he shall be deported
immediately after serving the sentence, without further proceedings for deportation.

SEC. 2. Section 142 of the National Internal Revenue Code, as amended, is hereby
further amended to read as follows:

SEC. 142. Wines. - XXX

“Any person liable for any of the acts or omissions prohibited under this Section
shall be criminally liable and penalized under Section 254 of this Code. Any person
who willfully aids or abets in the commission of any such act or omission shall be
criminally liable in the same manner as the principal.


an

SELLING WINE PRODUCTS TO PERSONS BELOW EIGHTEEN (18)
YEARS OLD SHALL BE PROHIBITED, AND SHALL BE PUNISHED WITH A FINE
OF FIFTY THOUSAND PESOS (P50,000.00) AND IMPRISONMENT OF (30) DAYS.

If the offender is not a citizen of the Philippines, he shall be deported
immediately after serving the sentence, without further proceedings for deportation.”

SEC. 3. 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 tuba, basi, tapuy and similar
fermented liquors in accordance with the following schedule:

“Effective on January 1, 2027, the tax shall be FIFTY PESOS (P50.00) per liter.

“Effective on January 1, 2028, the tax shall be FIFTY FIVE PESOS (P55.00)
per liter.

“Effective on January 1, 2029, the tax shall be SIXTY ONE PESOS (P61.00)
per liter.

“Effective on January 1, 2030, the tax shall be SIXTY SEVEN PESOS (P67.00)
per liter.

“Effective on January 1, 2031, the tax shall be SEVENTY THREE PESOS
(P73.00) per liter.

“Effective on January 1, 2032, the tax shall be EIGHTY ONE PESOS (P8100)
per liter.

“The rates of tax imposed under this Section shall be increased by six percent
(6%) every year thereafter effective January 1, 2033, through revenue regulations
issued by the Secretary of Finance.

“PRE-MIXED ALCOHOLIC BEVERAGES 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, 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 three-month period immediately preceding,


OMRON =

“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.

Any corporation, association, or partnership liable for any of the acts or
omissions in violation of this Section shall be fined treble the amount of deficiency
taxes, surcharges and interest which may be assessed pursuant to this Section.

Any person liable for any of the acts or omissions prohibited under this Section
shall be criminally liable and penalized under Section 254 of this Code. Any person
who willfully aids or abets in the commission of any such act or omission shall be
criminally liable in the same manner as the principal.

SELLING PRE-MIXED ALCOHOLIC BEVERAGES OR FERMENTED
LIQUORS TO PERSONS BELOW EIGHTEEN (18) YEARS OLD SHALL BE
PROHIBITED, AND SHALL BE PUNISHED WITH A FINE OF FIFTY THOUSAND
PESOS (P50,000.00) AND IMPRISONMENT OF (30) DAYS.

THE BOTTLE, CAN, OR ANY OUTSIDE PACKAGING OF PRE-MIXED
ALCOHOLIC BEVERAGES OR FERMENTED LIQUOR AND OTHER ALCOHOLIC
PRODUCTS SHALL HAVE THE CORRESPONDING HEALTH WARNING BASED
ON THE GUIDELINES TO BE ISSUED BY THE BIR, IN CONSULTATION WITH THE
DEPARTMENT OF HEALTH.

If the offender is not a citizen of the Philippines, he shall be deported
immediately after serving the sentence, without further proceedings for deportation.

SEC. 4, Section 8 of the National internal Revenue Code, as amended, is hereby

further amended to read as follows:

"Section 8. Duty of the Commissioner to Ensure the Provision and Distribution
of Forms, Receipts, Certificates, and Appliances, and the Acknowledgment of
Payment of Taxes. -

"(A) Provision and Distribution to Proper-Officials. - Any law to the contrary
notwithstanding, it shall be the duty of the Commissioner, among other things, to
prescribe, provide, and distribute to the proper officials the requisite licenses, internal
Tevenue stamps; unique, secure and nonremovable identification markings (hereafter
called unique identification markings), such as codes or stamps, be affixed to or form
part of all unit packets and packages and any outside packaging of cigarettes and
bottles OR CAN OR ANY PACKAGING of distilled spirits OR WINES OR PRE-MIXED
ALCOHOLIC BEVERAGE OR FERMENTED LIQUORS; labels and other forms;
certificates; bonds; records; invoices; books; receipts; instruments; appliances and
apparatus used in administering the laws falling within the jurisdiction of the Bureau.
For this purpose, internal revenue stamps, or other markings and labels shall be
caused by the Commissioner to be printed with adequate security features.

“Internal revenue stamps, whether of a bar code or fuson design, or other
markings shall be firmly and conspicuously affixed or printed on each pack of cigars
and cigarettes and bottles OR CAN OR ANY PACKAGING of distilled spirits OR
WINES OR PRE-MIXED ALCOHOLIC BEVERAGE OR FERMENTED LIQUORS


subject to excise tax in the manner and form as prescribed by the Commissioner, upon
approval of the Secretary of Finance.

"To further improve tax administration, cigarette and alcohol manufacturers
shall be required to install automated volume-counters of packs and bottles OR CANS
OR ANY OTHER PACKAGING OF ALCOHOLIC BEVERAGES to deter over-
removals and misdeciaration of removals.”

SEC. 5. 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
rules and regulations for the effective implementation of this Act.

SEC 6. 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 7. Separability Claus: 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 8. 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,