Plastic Bags Tax Act

Sentate Difice of the Sorerctarp TWENTIETH CONGRESS OF THE 25 DEC 15 P1:14 REPUBLIC OF THE PHILIPPINES First Regular Session RECEIVED BY: SENATE Senate Bill No. 1608 Introduced by Senator JOEL VILLANUEVA AN ACT IMPOSING EXCISE TAX ON PLASTIC BAGS, AMENDING FOR THE PURPOSE SECTION 288 AND ADDING A NEW SECTION 150-C IN THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED EXPLANATORY NOTE Plastic pollution is one of the most pressing environmental challenges of our time. More than 430 million tons of plastic are produced globally each year, with over two-thirds discarded after just one use. At the current trajectory, it is projected that there will be more plastic than fish in the ocean by 2050.1 The Philippines is the third largest contributor to ocean plastic pollution, with an estimated 750,000 metric tons of mismanaged plastic waste annually. This crisis is exacerbated by the country's heavy reliance on single-use plastics, especially sachets, giving rise to what has been dubbed a "sachet economy."? According to the Global Alliance for Incinerator Alternatives (GAIA), Filipinos consume 164 million sachets per day, which are often non-recyclable and persist in the environment for hundreds of years.3 UN Foundation. Protect Our Planet from Plastic Pollution: 5 Things to Know. Available at https://unfoundation.org/blog/post/protect-our-planet-from-plastic-pollution-5-things-to- know/?gad_source=1&gad_campaignid=19554869486&gbraid=0AAAAAD9kiAeP9Qcd3ydAx2mIwRUXD_1Iv& gclid=CjwKCAjwvO7CBhAqEiwA9q2YJQqv0himMbENwyNP_ROhiHNGwd9jeb80zmRJATJ7jlxXWtZTmVLAMxoC 8jUQAvD_BwE (Accessed on 24 June 2025). World Bank. Reducing Plastic Waste in the Philippines: An Assessment of Policies and Regulations to Guide Country Dialogue and facilitate Action. Available at: chrome- extension://efaidnbmnnnibpcajpcglclefindmkaj/https://documents1.worldbank.org/curated/en/099125107222 237489/pdf/P17099403d3da6044094b10b703a895c34d.pdf (Accessed on 24 June 2025). Sachet Economy: Big Problems in Small Packets. Global Alliance for Incinerator Alternatives. Available at /https://www.no-burn.org/wp-content/uploads/Sachet-Economy-spread-.pdf

The impact of this plastic dependency is far-reaching. Studies predict that plastic production and consumption in the Philippines will rise by over 50% in the next decade, and by as much as 230% by 2040 if current trends continue. Alarmingly, plastic types that are difficult or impossible to recycle are projected to grow by more than 200%, threatening to undermine the country's greenhouse gas mitigation commitments for key sectors such as industry, transportation, energy, and waste.+ Beyond environmental degradation, single-use plastics also pose serious public health risks. Chemicals commonly used in plastic packaging, such as phthalates, have been linked to heart disease, endocrine disruption, and reproductive health issues, according to recent scientific studies. 5 To address this, the bill proposes an excise tax on plastic bags removed from the place of production or released from customs. The goal is to reduce single-use plastic consumption, promote more responsible behavior, and protect the environment through the State's taxing power. According to the Department of Finance, the measure is expected to generate approximately P31.52 billion in revenues from 2025 to 2028.6 These funds will support waste management programs, particularly in municipalities. This proposed legislation is in line with the constitutional mandate to protect the right of the people to a balanced and healthful ecology. It also echoes the international movement toward extended producer responsibility, plastic reduction strategies, and green fiscal reform as advocated by the United Nations and other multilateral organizations. In view of the foregoing, the immediate passage of this measure is earnestly sought. брм- JOEL VILLANUEVA g 4 World Bank. Reducing Plastic Waste in the Philippines: An Assessment of Policies and Regulations to Guide Country Dialogue and facilitate Action. Available at: https://documents1.worldbank.org/curated/en/099125107222237489/pdf/P17099403d3da6044094b10b703a 895c34d.pdf (Accessed on 24 June 2025). The Lancet. Phthalate exposure from plastics and cardiovascular disease: global estimates of attributable mortality and years lost. Published in 2025. Available https://www.thelancet.com/journals/ebiom/article/PIIS2352-3964(25)00174-4/fulltext (Accessed on 24 June 2025) 6 DOF. DOF pushes for excise tax on single-use plastic bags, a win-win solution to address climate change. Published on 25 March 2025. Available at https://www.dof.gov.ph/dof-pushes-for-excise-tax-on-single-use- plastic-bags-a-win-win-solution-to-address-climate-change/ (Accessed on 24 June 2025).

i.... Senate Bffice of the Screetary TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES 25 DEC 15 P1:14 First Regular Session RECEIVED BY: SENATE 1608 Senate Bill No. Introduced by Senator JOEL VILLANUEVA AN ACT IMPOSING EXCISE TAX ON PLASTIC BAGS, AMENDING FOR THE PURPOSE SECTION 288 AND ADDING A NEW SECTION 150-C IN THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Short Title. - This Act shall be known as the "Plastic Bags Tax

Act."

SEC. 2. Declaration of Policy. - It is hereby declared the policy of the State

to protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm and harmony of nature through the proper exercise of its power of taxation.

SEC. 3. A new section designated as Section 150-C of the National Internal

Revenue Code of 1997, as amended, is hereby added to read as follows: "SEC. 150-C. PLASTIC BAGS. - (A) RATE AND BASE OF TAX. - THERE SHALL BE LEVIED, ASSESSED, AND COLLECTED AN EXCISE TAX IN THE AMOUNT OF ONE HUNDRED PESOS (PHP100.00) FOR EVERY KILOGRAM OF PLASTIC BAG REMOVED FROM THE PLACE OF PRODUCTION OR RELEASED FROM THE CUSTODY OF THE BUREAU OF CUSTOMS (BOC).

THE RATE OF TAX IMPOSED UNDER THIS SUBSECTION SHALL BE INCREASED BY FOUR PERCENT (4%) EVERY YEAR, EFFECTIVE ON JANUARY 1, 2026, THROUGH REVENUE REGULATIONS ISSUED BY THE SECRETARY OF FINANCE. "PLASTIC BAGS" SHALL REFER TO SECONDARY LEVEL PLASTICS MADE OF SYNTHETIC OR SEMISYNTHETIC ORGANIC POLYMER, SUCH AS "ICE", "LABO", OR "SANDO' BAGS, WITH OR WITHOUT HANDLE, USED AS PACKAGING FOR GOODS OR PRODUCTS. (B) FILING OF RETURN AND PAYMENT OF EXCISE TAX ON PLASTIC BAGS. - THE PROVISIONS OF SECTIONS 130 AND 131 OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED, ON THE FILING OF RETURN AND PAYMENT OF EXCISE TAX SHALL APPLY. (C) NON-PAYMENT OF EXCISE TAX - NON-PAYMENT OF THE EXCISE TAX IMPOSED UNDER THIS ACT SHALL BE SUBJECT TO THE PERTINENT PROVISIONS UNDER TITLES VIII AND X OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED, REGARDING COLLECTION OF UNPAID TAXES AND IMPOSITION OF CORRESPONDING FINES, SURCHARGES, PENALTIES, AND IMPRISONMENT OR CLOSURE OF BUSINESS."

SEC. 4. Section 288 of the National Internal Revenue Code of 1997, as

amended, is hereby further amended to read as follows: "SEC. 288. Disposition of Incremental AND OTHER Revenues. - (A) XXX (B) xxx (C) xxx (D) XXX (E) XXX (F) XXX (G) xxX (H) REVENUES FROM THE EXCISE TAX ON PLASTIC BAGS - THE INCREMENTAL REVENUES FROM THE IMPOSITION OF THE EXCISE TAX ON PLASTIC BAGS SHALL BE ALLOCATED TO PROGRAMS OF THE

DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES (DENR) FOR THE IMPLEMENTATION OF REPUBLIC ACT NO. 9003, OTHERWISE KNOWN AS THE 'ECOLOGICAL SOLID WASTE MANAGEMENT ACT OF 2000' IN MUNICIPALITIES. THE GUIDELINES FOR THE AVAILMENT OF FUNDS BY MUNICIPALITIES SHALL BE PREPARED BY THE DENR."

SEC. 5. Implementing Rules and Regulations. - Within sixty (60) days from

the effectivity of this Act, the Secretary of Finance shall, upon the recommendation of 9 the Commissioners of the Bureau of Internal Revenue and the Bureau of Customs, 10 and in consultation with the Department of Environment and Natural Resources, issue 11 and promulgate rules and regulations for the effective implementation of this Act.

SEC. 6. Separability Clause. - If any portion or provision of this Act is declared

unconstitutional, the remainder hereof or any provisions not affected thereby shall remain in force and effect.

SEC. 7. Repealing Clause. - All laws, decrees, executive orders, rules, and

16 regulations or parts hereof which are contrary to or inconsistent with any provision of 17 this Act are hereby repealed, modified, or amended accordingly.

SEC. 8. Effectivity. - This Act shall take effect fifteen (15) days after its

19 publication either in the Official Gazette or in at least one (1) newspaper of general circulation. Approved,