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Duty Free Philippines aims for sin tax repealDuty Free Philippines aims for sin tax repeal
Gavin Lipsith
12-May-2006
The state-owned retailer is discussing an amendment to exclude duty-free liquor and tobacco from a bill subjecting the products to excise duties.
State-owned duty-free operator Duty Free Philippines is hoping to persuade the government to pass an amendment to the sin tax bill introduced early last year, which subjects liquor and tobacco sold in duty-free stores to excise duties. A source close to the company told DFNI Asia the retailer has been discussing a move to propose the amendment with senior senators and congressmen, but is waiting for the right moment to launch the process.DFNI Asia understands that liquor sales volume has dropped by 8% since the tax was introduced in February 2005, while tobacco sales have fallen by 15%. By value, tobacco sales have also dropped by 15% while liquor sales value has fallen by 3%. Cigarette prices, which used to be on a par with those at Singapore Changi airport as the lowest in the region, are now closer to those at Hong Kong International airport, the source said.
"In its original form the sin tax bill did not include the section on duty-free liquor and tobacco, that was only added after one senator suggested it as a way to increase the government's tax revenues," said the source. "But Duty Free Philippines is part of the government and the decision has damaged its revenues. In order to get duty-free excluded it will need to convince the government that the negative effect on its sales outweighs the positive effect on tax revenues. Once it can prove this it will aim for an exclusion."
See DFNI May 15, out next week, for more details.
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(15-May-2006) - Duty Free Philippines (DFP) has recorded a 15% fall in volume and value sales of cigarettes since the Filipino government passed legislation subjecting tobacco goods sold in duty-free stores to excise duties in January 2005
(14-Dec-2004) - A bill proposed in the country's senate suggests removing the excise tax exemption enjoyed by duty-free liquor and tobacco
(21-Dec-2004) - Colombo Management Holdings believes the passage of legislation imposing excise tax on duty-free liquor and tobacco will severely damage liquor sales at Duty Free Philippines from late January
(12-Jan-2006) - The excise tax on "duty-free" liquor and tobacco now applies in the country's ports and free zones
(15-Jan-2005) - By Gavin Lipsith Retail News Editor