The Philippines Government has amended the National Internal Revenue Code (NIRC) which expanded the coverage of Value-Added Tax (VAT) on vape, tobacco, and liquor. This is primarily seen as a cost-effective measure of improving health and reducing non-communicable diseases. Secondly, this will bring in additional revenue that can benefit the underserved.
Vape products will be taxed from P37 per millilitre and tobacco P25 per pack. The regulation is with sight to numerous Filipinos at risk of dying due to tobacco-related diseases.
The excise tax will be levied on distilled spirits which is equivalent to 22% of the net retail price and on wines P50 per litre with effect from 1 January 2020.
Moreover, the sale or importation of drugs for diabetes, cholesterol, and hypertension are VAT exempt from 1 January 2020 and the drugs for cancer, tuberculosis, mental illness and kidney from 1 January 2023 which will make them cheaper, making it more affordable for Filipinos.
It is expected that the Philippines sin tax would bring P17 billion additional revenue. 60% of the additional revenue is decided to be allocated for the implementation of the UHC Act of 2019, 20% for health care facilities and requirements of the Department of Health (DOH) and the remaining for achieving Sustainable Development Goals.
