The Department of Finance said Tuesday it might take a while before Congress could pass a new tax scheme for cigarettes and alcoholic beverages to raise additional revenues for the government.

"I think the sin tax will take a little while because it is more controversial I guess," said Finance Secretary Margarito Teves.

The domestic cigarette market is dominated by tycoon Lucio Tan's Fortune Tobacco and Virginia-based Philip Morris. Major liquor makers, on the other hand, include San Miguel Corp. and Tanduay, among others.

Teves noted, however, they are hopeful that Congress would look into the proposed bill to amend Republic Act 9334 or the indexation of the so-called sin products within the first quarter of 2009.

RA 9334 mandates a rise in tax rates every two years starting 2005 until 2011. However, the government still failed to achieve the targeted increase in tax takeup.
 
The new bill seeks to slap a uniform excise tax on cigarettes and a higher tax rate on alcohol products to simplify and enhance tax collection.

Under the current system, the excise tax levied on tobacco products vary depending on their price classification: low (below a net retail price of P5 per  pack), medium (P5 to below P6.50), high (P6.50 to P10), and premium (above P10).

The proposed bill wants to implement an excise tax of P8 on cigarettes with a net retail price of P6.50 per pack and P14 on those with a net retail price of above P6.50 per pack.

Meanwhile, distilled spirits with less than 45 percent alcohol content will be levied P30 per proof liter on the first year, P80 on the second and P150 on the third year. Those with over 45 percent alcohol content will be taxed P150 per proof liter.
 
Wines will be taxed P300 per liter of volume capacity while still wines will be levied P50 per liter. Fermented liquor including beer, lager beer, ale, porter will be levied an excise tax rate of P21.52 per liter. 

With the new sin tax system, the government said it could raise incremental revenues of P12.9 billion next year and P18.6 billion in 2010.