Bill on increased taxes on alcohol, cigarettes gets support

Published May 27, 2019, 3:49 PM

by AJ Siytangco

By Mario Casayuran

House of Representatives Speaker Gloria Macapagal Arroyo has assured Senate President Vicente C. Sotto that her legislative chamber would support whatever is the Senate decision on how much excise tax to be imposed on cigarettes and alcohol, for a bigger revenue to finance the multi-billion-peso Universal Health Care (UHC) program.

(FLICKR / MANILA BULLETIN)
(FLICKR / MANILA BULLETIN)

This was revealed Monday by Karl Kendrick Chua, Department of Finance (DOF) Undersecretary, during a radio interview.

Senator Sherwin T. Gatchalian, chairman of the Senate economic affairs committee, was scheduled to sponsor late Monday a bill seeking to increase taxes from alcohol and cigarettes in a bid to reduce cigarette smoking and alcohol drinking.

Reacting to the House Speaker’s offer in a letter to Sotto in a bid to accelerate congressional approval of the “sin’’ tax measure, Gatchalian said “this is good’’ because the proposed rate of excise tax is much lower at the House of Representatives’ bill than at the Senate’s.

Lawmakers expect President Duterte to certify the “sin tax” measure to avoid a two-day printing rule after its passage on second reading.

A certified bill, if approved on second reading, is immediately voted on third and final reading. This does away with the reglamentary two-day printing rule.

Gatchalian said Congress would go back to “zero’’ if they do not pass the bill before they adjourn sine die on June 7.

Both the Senate and the Lower House have only five more days before they go on a six-week adjournment.

The Lower House tax rate increase is P30 per pack, and this will increase in the next three years to P45.

There are three proposals in the Senate: P60 per pack by Senator Emmanuel D. Pacquaio; P70 per pack by Gatchalian, and P90 per pack by Senator Joseph Victor Ejercito.

Chua said the revenue to be collected by the House bill is P11 billion for the first year which is “too low’’ vis a vis the projected UHC expenditures.

Chua said the “sin tax” measure needs P267 billion for the first year and the government has at present P195 billion. What is needed is P62 billion more, he added.

And the DOF supports the Pacquaio formula, he added.

The UHC was a major legislation authored by Ejercito.

Chua said he learned that six of the 10 members of the Senate ways and means committee chaired by Senator Juan Edgardo Angara have so far signed the committee report on the sin tax bill.

At present, financial benefits from PhilHealth are small, Chua said.

But a well-funded UHC would increase the free or reduced purchase price of 18 medicines to 120 medicines covering seven diseases, he explained.

Gatchalian said passage of the sin tax bill would be like hitting two birds with one stone: increased revenue and reduce cigarette smoking.

He said that government spends P210 annually million for cigarette smoking-related diseases.

 
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