Duterte agrees to certify bill on higher cigarette, alcohol tax as urgent

MANILA, Philippines – President Rodrigo Duterte agreed to certify as urgent the bill of Senator Manny Pacquiao increasing tobacco tax to P60 per pack, from the current P30.

Duterte approved the recommendation of the Department of Health (DOH) and the Department of Finance (DOF) to back Pacquiao's bill, which he filed in October 2017.

Senate Bill Number 1599, seeking to amend Republic Act 10351 or the Sin Tax Reform Act of 2012, increases the current unitary excise tax rate to P60 per pack from P30 per pack, and the annual excise tax to 9% from 4%.

"The recommendation of the Department of Finance and the Department of Health is that this bill should be certified as urgent because, under the proposal, the tax on tobacco would be raised to P60 per pack, while on the part of alcohol it will be P40 per liter, so the recommendation is that that bill should be passed and signed into law," said Presidential Spokesman Salvador Panelo on Tuesday, January 8.

On Monday night, Duterte presided over the first Cabinet meeting of 2019, during which he approved the DOH and DOF recommendation on Pacquiao's bill.

But back in October 2018, Health Secretary Francisco Duque, in a letter to Duterte, had backed another Senate version of the bill, Senate Bill Number 1605, which seeks to impose a tax of P90 per pack, not P60 per pack.

Fund for universal health care

Panelo said the tobacco and alcohol tax hike would generate funds for the proposed universal health care program, which Duterte supports.

"This is a key public health measure to reduce deaths and disabilities due to tobacco and alcohol consumption, and, at the same time, a revenue measure to fund the universal health care program," Panelo said in a statement.

Pacquiao, after filing his bill, had said that the higher tobacco and alcohol tax could generate some P60 billion to P70 billion in revenue for the government.

The DOH previously said about P257 billion was needed for the first year of the universal health care program's implementation.

The Senate and House were able to reconcile their versions of the universal health care (UHC) bill last November. Duterte has yet to sign it into law.

The UHC bill seeks to automatically enroll all Filipinos in the proposed National Health Insurance Program. 

Meanwhile, bills for raising tobacco and alcohol taxes have been pending in the Senate since November 2017. In contrast, the House of Representatives passed its versions of a bill jacking up cigarette tax and a separate bill increasing tax on alcohol in December 2018.

Whatever bill for higher tobacco and alcohol taxes will be passed into law will add to existing taxes imposed by the first tax reform package or the Train Law.  Rappler.com

Pia Ranada

Pia Ranada covers the Office of the President and Bangsamoro regional issues for Rappler. While helping out with desk duties, she also watches the environment sector and the local government of Quezon City. For tips or story suggestions, you can reach her at pia.ranada@rappler.com.

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