THE Department of Finance (DOF) continues to urge Congress to pass the measure aimed at increasing further the excise tax rates for “sin” products, specifically cigarettes.
Finance Secretary Carlos G. Dominguez III said that increasing the current tobacco excise tax rates to levels that would effectively curb smoking, which is deemed at P60 per pack, would also help supplement funds for the Universal Health Care program.
“There’s still the Senate. We will try our best. This thing doesn’t end until the President signs it,” Dominguez said. “We’re there, we’re keeping at it. We hope that they will come up to what is good for the country.”
The finance chief was reacting to the recent approval on third and final reading of House Bill 8677, which provides for an increase in tobacco excise tax rates. These rates, however, reached levels that were not what the Department of Health and anti-tobacco and health advocates recommended.
The bill approved at the Lower House aims to raise the current tax of P35 per pack of cigarettes to P37.50 beginning July 2019. The bill also calls for another increase to P40 in July 2020, P42.50 in July 2021 and P45 in July 2022. Thereafter, the rate shall be raised 4 percent every July annually.
The DOF proposal, which is under Package 2 Plus of the Comprehensive Tax Reform Program, supports the position of Rep. Angelina Tan (Fourth District, Quezon) to raise the tobacco excise tax to P60 per pack in 2019 and increase it by 9 percent annually thereafter.
“The society has to agree what is more important: enough money for health care or favoring companies that produce products that damage health?” she said. “That’s what society has to agree on, and that’s what the representatives in the legislature are supposed to reflect.”
Antonio Miguel L. Dans of the National Academy of Science and Technology was quoted in a statement as saying that preliminary calculations estimate that about 150,000 new smokers as a result of the rates approved by the House Ways and Means committee.
Finance Assistant Secretary Antonio Joselito G. Lambino II pointed out that the government is collecting around P100 billion on average from tobacco excise since the implementation of the sin tax reform law, or Republic Act 10351.
Passed in December last year, the Tax Reform for Acceleration and Inclusion (TRAIN) law provided for an increase in cigarette excise tax rates from P30 per pack to P32.50 in the first half of 2018. This was increased further to P35 per pack starting July this year.
Philip Morris Fortune Tobacco Corp. (PMFTC), a joint venture between Philip Morris Philippines Manufacturing Inc. and Fortune Tobacco Corp., said it stands by its position on a further increase in tobacco excise taxes.
“Our position submitted to Congress is unchanged. We believe any further increases in excise taxes on tobacco at this time are unwarranted,” a statement by PMFTC said. “There is still a need to review the impact of the last increase under Train in terms of tax collection, revenue utilization, on the livelihood of farmers, jobs in the manufacturing sector and the rise of counterfeit cigarettes.”
Image credits: Alysa Salen