HEALTH advocates have lauded the signing into law of the proposal to increase the taxes on tobacco products.
“On behalf of the health advocates, I would like to thank President Rodrigo Duterte for signing into law the increase in tobacco taxes. Taxing tobacco products has proven to be one of our most effective health measures, and this latest tax increase represents another positive step in protecting more Filipinos from the harmful effects of cigarette smoking,” said Dr. Anthony Leachon, health advocate and former independent director of PhilHealth.
Health Secretary Francisco T. Duque III also thanked the President noting that Republic Act 11346 (RA 11346), which imposes an increase to the excise tax on cigarettes and also introduces an excise tax on heated tobacco products and vapor products, will help make the funding of Universal health-care sustainable.
Under the new law, the new tax rates for cigarettes will increase from P35 to P45 in 2020, P50 in 2021, P55 in 2022 and P60 in 2023.
Meanwhile, heated-tobacco products will be taxed at P10, with a 5-percent increase in the tax in each succeeding year.
In the case of vapor products, the tax on juices will be as follows: P10 for 0.00 mL to 10 mL, P20 for. 10.01 mL to 20 mL, P30 for 20.01 mL to 30 mL, P40 for 30.01 mL to 40 mL, P50 for 40.01 mL to 50 mL, and P60 for more than 50 mL. For every succeeding year, the tax on vapor products will increase by 5 percent.
According to Leachon, the new law is expected to lead to a decrease in the country’s smoking prevalence.
“The 2018 National Nutrition Survey states that the adult-smoking prevalence currently stands at 20.7 percent. This latest round of increases to the tobacco taxes should ensure that the total number of smokers in the country does not increase, and that we potentially achieve the Department of Health’s target smoking prevalence of 15 percent,” Leachon said.
Leachon also added that the revenue generated will provide additional funding for the Universal Health Care (UHC) law, which was also signed earlier this year.
“According to calculations from the Department of Finance, a funding gap of around P63 billion still exists for the first year of UHC’s implementation. Meanwhile, the tobacco tax increase is expected to generate incremental revenue of P15.7 billion. In this regard, the tax increase should help bridge this gap,” Leachon explained.
Leachon stated that given the funding gap that would still exist for UHC, increasing the tax on alcoholic beverages and a further increase to the tax on electronic nicotine delivery systems must also be prioritized.