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Philippines extends sin taxPhilippines extends sin tax
Gavin Lipsith
12-Jan-2006
The excise tax on "duty-free" liquor and tobacco now applies in the country's ports and free zones
The Philippines has extended its sin tax on duty-free liquor and tobacco products to cover ports and free zones as well as airports and downtown stores. Traders had previously gained an injunction against the bill applying in free zones but, under a new regulation issued by the bureau of internal revenue, products sold in the zones and at free ports will be liable for excise tax and VAT.The regulation clarified that government-owned and operated duty-free shops such as the Duty Free Philippines are exempted from all applicable duties but must pay the corresponding excise tax and value added tax (VAT).
The sin tax has had a dramatic effect on the local duty-free market since it was introduced last year. Local airlines claim that the tax has reduced their tobacco sales by as much as 50%.
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(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
(14-Dec-2004) - A bill proposed in the country's senate suggests removing the excise tax exemption enjoyed by duty-free liquor and tobacco
(12-Jul-2006) - The country's department of finance hopes to increase the tax on liquor and tobacco at duty-free stores despite low revenues from the tax last year
(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.
(15-Jan-2005) - By Gavin Lipsith Retail News Editor