THE Senate’s recent approval of a bill increasing the taxes on cigarettes came as a welcome development for stakeholders as they found it favorable to solely finance the implementation of the Universal Health Care (UHC) program of the government.
World Health Organization Representative Dr. Gundo Weiler lauded the chamber for giving a green light to Senate Bill 2233 on June 3, with a vote tally of 20-0-0.
This legislative measure was amended to include “heated tobacco products” and “vapor tobacco products,” such as e-cigarettes to be also subject to excise taxes, following the proposed changes made by Sen. Ralph Recto.
“In general, we support the increase of tobacco taxes. We believe it’s really an important measure,” he told the BusinessMirror during their forum on “European Union Health Programmes and Recommendations for the Universal Healthcare Partnership” held at the Manila Hotel on the same day.
He noted that such move helps increase the fiscal space needed to bankroll the enforcement of the UHC Act aimed at covering all Filipinos with health insurance and offering basic health services.
SB 2233, if signed into law, will hike the excise tax on cigarette packs from P45 by January 1, 2020, to P60 by 2022. The following year, the tax will rise by 5 percent annually. For e-cigarettes, the rates are lower, with at least P10 for each refill of vapor products less than 10 milliliters.
Under the Tax Reform for Acceleration and Inclusion law, which took effect last year, a tax of P35 is currently applied to every pack of cigarettes.
“We look at it as a ‘win-win’ measure because on one hand it will help to generate funding for the government, and particularly for implementation of the Universal Health Care Act, which is important, and it will need more investments,” Weiler said.
“At the same time, it discourages unhealthy behaviors, mainly smoking because we know the higher the price for cigarette is, the more people will give up smoking or stop in the first place,” he added.
Based on the Department of Finance report, the UHC program of the administration of President Duterte is estimated to cost P257 billion for the first year of implementation, with P195 billion to be provided for by the national budget. The remaining amount of P62 billion is eyed to be financed by higher duties from cigarettes and alcoholic drinks.
While the estimated P15-billion tax revenues expected to be raised under the proposed imposition of higher excise duties on tobacco products is seen not enough to finance the gap in the state’s landmark health-care initiative, the Department of Health (DOH) remains positive on its impact to the country and its people.
“That’s still favorable to health. So definitely the DOH and, in general, the health sector will support that,” DOH Undersecretary Dr. Mario Villaverde told reporters in a sideline interview.
For him, the limited resources will not be a challenge if they will be spent efficiently so as to cover more beneficiaries of the UHC program.
“It’s not really how much but how best you utilize the money,” he explained. The health chief, for instance, cited the need to address some duplications in the country’s current health system in terms of “who pays for what.”
“If we can fix that through the Universal Health Care Act, including the right payment mechanism for health providers, then such limited resources will be maximized well,” Villaverde said.
Among the key priority measures of the Duterte administration, the UHC bill was certified as urgent by the President on May 28. According to him, it was a highly needed measure to finance expanded medical services and benefits to all Filipinos as provided under Republic Act 11223.
“It does show his very strong political commitment,” Weiler said. “UHC is a political choice that stands for real change here.”
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