A total of 11 senators have signed a committee report proposing an increase in excise taxes on tobacco products in a bid to reduce smoking among Filipinos and to generate additional funding for the government’s Universal Health Care (UHC) program.
The proposal was contained in Committee Report No. 714 prepared by the Senate committee on ways and means. It seeks to raise the excise tax for every cigarette pack from P45 to P60 over the next four years.
The report proposes a starting rate of P45 in 2020 or an increase of P10 in the first year of implementation, followed by P5 increase each year until the rate reaches P60 in 2023. Thereafter, the rate automatically increases by 5 percent.
Among the signatories of the report include committee chair Sonny Angara, Senate President Pro Tempore Ralph Recto and Senators Win Gatchalian, Risa Hontiveros, JV Ejercito, Panfilo Lacson, Francis Pangilinan, Franklin Drilon, Loren Legarda, Nancy Binay, and Juan Miguel Zubiri.
Angara said his panel did a “balancing act” when it chose a gradual tax increase instead of an immediate P25 bump to the current rate in an attempt to reconcile the competing interests of the government, health advocates, the cigarette industry, and tobacco farmers.
“The panel did a balancing act.”
The seasoned legislator said the committee members consider the tobacco tax hike bill as an important legislation that would not only help reduce deaths and disabilities due to smoking, but also generate the much-needed revenues for the UHC program.
The veteran lawmaker, however, noted that they also could not ignore the impact of raising the excise tax on the livelihood of tobacco farmers.
“We’re legislating not so much a single sweet spot, but a ladder where we hope all stakeholders involved can make a smooth transition,” the senator said.
“In essence, we’re providing up to four years of graduated increases so that more of our tobacco farmers can shift crops; the tobacco companies can recast their financial projections; and the DOH (Department of Health) can catch up with its understanding,” he added.
“We’re providing up to four years of graduated increases so that more of our tobacco farmers can shift crops.”
It can be recalled that President Rodrigo Duterte has certified as urgent Senator Manny Pacquiao’s Senate Bill 1599, which seeks to raise the current unitary excise tax rate to P60 per pack with a yearly increase of 9 percent.
The Department of Finance said the measure will help fill in the P40 billion funding gap for the UHC.