House panel approves higher tobacco tax rates starting 2019

MANILA, Philippines – The House committee on ways and means approved the measure that will once again increase the excise taxes on tobacco products.

This was confirmed to Rappler by panel chairperson and Nueva Ecija 1st District Representative Estrellita Suansing as well as committee member and Marikina 2nd District Representative Miro Quimbo on Tuesday, November 27.

The still unnumbered bill would increase the tax on every cigarette pack from the current P32.50 to P37.50 in July 2019. The measure would then impose a P2.50 tax increase every year until July 2022, when a cigarette pack would cost P45 each. A 4% tax increase would then be imposed annually starting July 2023.

The measure is set to be sponsored at the plenary for 2nd reading on Tuesday afternoon.

Prior to the bill's approval, however, Batangas 4th District Representative Lianda Bolilia and Cooperative NATCCO Network Party Representative Anthony Bravo said they are not in favor of increasing the excise taxes on tobacco products.

No less than Health Secretary Francisco Duque III already asked President Rodrigo Duterte to certify as urgent the bill seeking seeking to raise tobacco taxes in order to fund the universal health care (UHC) program. 

Duque argued that increasing the tobacco tax would not only fund the UHC bill, but also lower smoking prevalence in the country from 21.6% of the population down to a target of 15.7%. (READ: Lifestyle diseases 'rapidly rising' in Western Pacific region – WHO) 

What is Bolilia's concern? Bolilia said she is not against increasing taxes per se. But she questioned why members of the health sector repeatedly say that increasing the taxes on cigarettes would lower the number of smokers.

She said the Department of Health (DOH) should focus more on strengthening its anti-smoking campaign.

"I am not saying do not increase the taxes. As a revenue measure, I'm fine with it. But we keep on saying that there is prevalence of smoking because the prices of cigarettes are low. But can't we intensify our campaign against smoking instead? Because we've been saying that prevention is better than cure," said Bolilia in a mix of English and Filipino.

How did the DOH reply? Health Undersecretary Eric Domingo then explained that while the DOH has ongoing campaigns against smoking, an excise tax hike is still the "most cost-effective" way to deter people from smoking.

He cited the ongoing implementation of President Rodrigo Duterte's smoking ban, which restricts tobacco use to designated smoking areas and also bans minors from buying or using cigarettes.

Domingo also mentioned the graphic warning labels on cigarette packs, which the DOH has been modifying over the years.

"Our plan is actually multi-pronged. We have restriction of smoking areas, restriction of buying for minors and of course, [the] packaging and the labeling has been changed a lot. And these ones will really contribute. It's really the increased prices that is the most cost-effective measure," said Domingo. 

What is Bravo's concern? Bravo, meanwhile, said the government is better off implementing existing laws that are aimed to raise revenues. This includes the Tax Reform for Acceleration and Inclusion (TRAIN) law.

"This representation, madam chair, is in a position not to support additional excise tax for tobacco until a study could be shown for the impact on TRAIN 1," said Bravo, who added that the House just passed another bill that would increase the excise tax on alcoholic drinks.

He also suggested that the government improve the implementation of the attrition law as well as its campaign against smuggling in the country. The attrition law rewards tax collectors who meet their collection targets and dismisses those who fail to meet the collection requirement. – Rappler.com

Mara Cepeda

Mara Cepeda writes about politics and women’s rights for Rappler. She covers the House of Representatives and the Office of the Vice President. Got tips? Send her an email at mara.cepeda@rappler.com or shoot her a tweet @maracepeda.

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