Beer taxes in the Philippines: is it still feasible to increase taxes on beer?
Date
2010-04
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Abstract
This study aims to analyze the consumption patterns of beer in the Philippines and determining if it is still feasible to increase taxes on it in order to generate more revenue for the government. Data from the Family Income and Expenditure Survey (FIBS) that contains information on the expenditure of family households was used. The two-stage Heckman selection model was used in order to remove the bias generated by the zeroes in the dataset (which may mean either they haven't consumed beer or they have consumed beer but have not paid for it). The results show that the choice of beer consumption is determined by many factors (e.g. living in the urban areas, regional effects, number of family members, and occupation of the household heads) and is not solely income. Beer consumption mainly depends on how much income a person has and is also affected by how many members there are and the purchase of other alcoholic beverages. Predictions were also done and the results showed that increasing taxes would affect the rich more than the poor and would have greater effects regions that consume more beer than those who consume less. This results points out that an increase in beer tax is a good government action and would generate more revenue for the government while curbing the consumption of beer to lessen the health problems associated with excessive drinking.
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Keywords
Beer taxes, Alcohol, Philippine alcohol tax, Fiscal policy, Taxes