Bloomberg lauds PH for sin tax law

ABU DHABI – For passing the Sin Tax Law of 2012 and implementing tax collection that will expand health care coverage, the Philippines was recognized as one of the winners of the Bloomberg Philanthropies Awards for Global Tobacco Control that honors effective tobacco control policies during ceremonies at the 16th World Conference on Tobacco or Health that concludes here Saturday.

The award honored the government’s Department of Finance and Department of Health for their critical roles in passing the law that imposed higher taxes on tobacco and alcohol products, making it more efficient to increase taxes on tobacco. (READ: Bloomberg, Gates launch anti-tobacco industry fund)

Former New York City mayor and business magnate Michael Bloomberg, who spearheads the activity, handed the award to Philippine representatives Finance Undersecretary Jeremias Paul and Health Assistant Secretary Dr. Paulyn Jean Rosell-Ubial in glittering ceremonies Wednesday night, March 18, at the Abu Dhabi National Exhibition Centre, host of the conference that is held every 3 years.

"The Philippines’ (finance and health departments) played a critical role in passing the Sin Tax Law in 2012, which made it more efficient to raise the tobacco tax by simplifying the country’s tax structure," the Bloomberg Awards citation stated.

It also said the government "stood strongly for tax increases vocalizing their support to the media and Congress while fighting strong opposition and interference by the tobacco industry since the law’s passing," and cited the country’s efforts to expand universal healthcare across all sectors to improve public health.

The Awards’ MPOWER method stands for M – Monitoring tobacco use and prevention policies; P for protecting people from tobacco smoke with smoke-free legislation, O for offering help to quit tobacco use, W for warning about the dangers of tobacco with pack labels and media, E for enforcing bans on tobacco advertising, promotion and sponsorship, and R for raising taxes on tobacco.

2nd time

The Philippines was recognized for the R category. The other governments and NGOs that were awarded were in Brazil, Nepal, Russia, Ukraine and Uruguay.

This was the second time that the Philippines was recognized for tobacco control interventions. 

In 2012, Health Justice Philippines, a nongovernment think tank group founded by doctors, lawyers and economists that advocates for policy changes in health, environment and human rights, received the same honor for monitoring tobacco use and prevention policies.

The Sin Tax Law or RA 10351 imposes higher taxes on tobacco and alcohol products while simplifying the tax structure and making uniform rates to make it more efficient to raise tobacco taxes. (READ: INFOGRAPHIC: Imagining a world with no tobacco)

Upon its signing in December 2012 by President Benigno Aquino III, the Philippines was said to have overcome the strong industry lobby that kept prices in the Philippines among the cheapest in the world. The enactment of the law ended a long battle to reform the Philippines' excise tax system. The revenue from the sin tax law aimed to benefit public hospitals and health facilities and to expand the coverage of health insurance.

Challenge for government

Filipino activists and advocates of tobacco control are in full force at the world conference. Members of Health Justice Philippines and the Southeast Asia Tobacco Control Alliance (SEATCA) lauded the health and finance departments for winning the award.

Irene Reyes, managing director of Health Justice said, "The sin tax law is a life-saving measure that is recognized worldwide. We are glad that the country has become a global role model for increasing tobacco taxes."

"Although the law is still at its initial stage, we are already seeing its gains in both revenues and health outcomes. We hope that the Philippine government will sustain its strong implementation of the law. At the end of the day, the true measurement of the law’s effectiveness is not in the number of awards received, but in the lives that are saved from the harms of smoking," Reyes added.

Dr. Ulysses Dorotheo, program director of SEATCA on the World Health Organization (WHO) Framework Convention on Tobacco Control (FCTC), said the award to the Philippines recognizes the government’s compliance with its obligations under the convention and is both a pat on the back for protecting public health by increasing tobacco taxes but also a challenge to sustain the gains of the sin tax law."

The Health Justice said in 2013, the government was able to exceed targets for incremental revenue collection that allowed for the DOH to allocate funds for different health programs, including the expansion of Philippine National Health Insurance coverage for 14.7 million poor and near-poor Filipino families. (READ: A year of sin tax: More work ahead)

It also cited a 2014 Social Weathers Station (SWS) survey that showed a significant drop in smoking among the poor and the youth from 38 percent in December 2012 among those in the socioeconomic class E or the very poor to 25 percent in March 2014. Across age groups, smoking prevalence among those 18-to-24-years of age also decreased from 35 percent in December 2012 to 18 percent in March 2014.

In an earlier presentation in one of the sessions, Finance Undersecretary Paul explained to conference delegates that the sin tax law simplified the tax system, introduced higher excise rates and indexed the tax rate to an inflation projection of 4% annually until 2017. He also said the measure has eased the collection of P25 billion on the first year of its implementation.

He added that of the amount set to be collected, 15% will go to tobacco farmers’ safety nets and 85% will go to the health budget. Of the allocation for health, 80% will be funneled towards the government’s Universal Health Care Program, and 20% to enhancing health facilities and building new ones.

The Philippines is a signatory to the FCTC in 2005. It is also one of the countries in the world that is being cited for its efforts to put graphic pictures and images of the adverse outcomes of smoking on the human body to warn smokers of the dangers. – Rappler.com