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SENATE APPROVES TOBACCO TAX HIKE BILL

The Senate has approved on third and final reading a measure seeking to increase the excise taxes on tobacco products in a bid to reduce smoking among Filipinos and generate additional funds for the government’s Universal Health Care program.

With 20 affirmative votes and no negative vote, the upper chamber passed Senate Bill No. 2233 seeking an increase in excise tax for every cigarette pack from P45 to P60 over the next four years.

A five percent yearly hike shall also be imposed effective Jan. 1, 2024.

A five percent yearly hike shall also be imposed.

The bill’s third reading approval came after it was passed on second reading with several amendments on the same day.

Congress dispenses with the three-day rule for measures certified by the President as urgent.

President Duterte has certified the bill as urgent.

In his certification of urgency, President Rodrigo Duterte said the measure will address “the urgent need to further protect the right to health of the people”.

Duterte said the bill will also maintain a broader fiscal space to support the effective implementation of the Universal Health Care Act or Republic Act 11223.

The bill proposes the following scheduled increase: P45 per pack increase effective Jan. 1, 2020 until Dec. 31, 2021, P50 in Jan. 2021, P55 per pack in Jan. 2022 and P60 per pack effective Jan. 1, 2023.

Among the notable amendments is the taxation on heated tobacco products and vapor products and the earmarking of the revenues to be collected.

Under Republic Act 10963, also known as the Tax Reform for Acceleration and Inclusion (TRAIN) which took effect on Jan. 2018, the existing excise tax rates on cigarettes packed by hand and packed by machine is as follows: P37.50 per pack beginning Jan. 1, 2020; P40 starting Jan. 1, 2022; and four percent increase every year thereafter.

The Department of Finance said the measure will help fill in the P40 billion funding gap for the UHC.

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