Duterte OKs new "sin taxes," VAT exemption on some medicines
President Rodrigo Duterte has signed into law a bill that further increases taxes on so-called "sin products," such as alcohol and e-cigarettes, and expanding the coverage of value-added tax-exempt sales and importation of medicines.
In a press briefing on Thursday, Presidential Spokesperson Salvador Panelo, however, said that the President vetoed a provision in Republic Act No. 11467, which provides amendments in some sections of RA 8424, as amended, otherwise known as the National Internal Revenue Code of 1997, and for Other Purposes.
"I am constrained to veto Section 5 of the measure, which amends the second paragraph of Section 152 of the National Internal revenue Code (NIRC) as this unduly curtails the search and seizure powers of the Bureau of Internal Revenue (BIR)," the President said in his veto message sent to the leadership of both Houses of Congress.
He said the phrase "upon order of the court" unnecessarily requires the BIR, in the exercise of its mandate to examine, search, and seize under Section 171 of the NIRC, as amended, to secure and order from the court before its officers may be allowed to enter any house, building, or place where tobacco, heated tobacco, and vapor products are produced or kept, or are believed to be produced or kept.
"Such restriction does not exist with respect to any other taxable article," he said.
Duterte expressed confidence the "multi-tiered effect" of the new law as "cost-effective health measure" to reduce smoking and alcohol consumption among the Filipinos supports the Universal Health Car Act.
"Coupled with its positive impact in improving domestic resource mobilization, this measure will significantly reinforce and advance this administration's commitment to provide a better quality of life for every Filipino," he said.
Under the law, sale or importation of prescription drugs and medicines for diabetes, high cholesterol and hypertension shall be exempted from VAT starting Jan. 1 this year.
Beginning Jan. 1, 2023, prescription drugs and medicines for cancer, mental illness, tuberculosis, and kidney diseases are also VAT-exempted.
The law also provides for the increase on the ad valorem taxes on distilled spirits on different dates, starting this year.
The government will start to impose higher excise tax on tobacco products, heated tobacco products, and vapor products. Celerina Monte/DMS