Duty Free Philippines and Philippine Airlines are lobbying the State over a new “Sin Tax” which makes their “duty free” L&T pricing uncompetitive.

 

Effective from January 1, the Philippines’ Bureau of Internal Revenue applies progressive tax rises for alcohol and tobacco, plus new VAT rates for these and for other products.

 

At issue in the new guidelines is wording stating that imported alcohol and tobacco products – including those designated for duty free sales – are subject to excise tax.

 

Talking to The Business this month, Duty Free Philippines’ Chief Operating Officer Lorenzo “Enchong” Formoso said the State-owned duty free operator hopes to push through amendments to the recently signed Sin Tax bill to exempt Duty Free Philippines from these taxes.

 

 

TAXES DAMAGING PRICING

He said: “Prices of our liquor and tobacco products have become uncompetitive and this could gravely affect the viability of our business. We need to point out to our legislators that being a state-owned travel retailer, the profits we generate can help promote the country’s tourism.”

 

Philippine Airlines’ Supervising On Board Sales Specialist Rustica S. Tizon agreed that the situation is serious. She said the implementation of the new Sin Tax and its uncompetitive pricing impact could mean that the airline decides that it will no longer carry liquor and tobacco products in future.