DOF expects bill raising tobacco excise tax to be signed into law soon

Published July 24, 2019, 6:32 PM

by Martin Sadongdong & Antonio Colina

By Genalyn Kabiling 

President Duterte is expected to sign into law a bill raising excise taxes on tobacco products this week, according to Finance Undersecretary Karl Kendrick Chua.

Finance Undersecretary Karl Kendrick Chua (Karl Kendrick Chua FACEBOOK / MANILA BULLETIN)
Finance Undersecretary Karl Kendrick Chua

“I was told it will be signed this week because that is a priority measure, certified urgent by the President in the previous Congress and mentioned by the President in the SONA (State of the Nation Address),” Chua said during a Palace press briefing.

Under the measure, the government will raise the excise tax on cigarette packs in the next four years, starting with P45 by January 2020. It will be raised by P5 annually until it reaches P60 by 2023. At present, the government slaps an excise tax of P35 per cigarette pack.

The President has called for the passage of the tobacco tax bill “to address the urgent need to further protect the right to health of the people and to maintain a broad fiscal space to support the effective implementation of the Universal Health Care Act.”

Chua said the enrolled tobacco tax bill was transmitted to Malacañang last June 27, and will lapse into law on July 27 if the President does not act on it.

“And my understanding is it is ready for signature by the President,” he said.

“The Tobacco Excise Bill passed by the 17th Congress which increases the rates of the tobacco excise from P35 to P45, and added a tax on heated tobacco products and the e-cigarettes,” he added.

The government earlier proposed higher excise taxes on tobacco and alcohol products to augment funding for the government’s health care program. The tax reform measure is part of second tranche of Comprehensive Tax Reform Program (CTRP).

Chua said the additional revenues from the sin taxes would help ensure the universal health care program will be a first-class law in terms of providing better services to Filipinos. He said the measure would help fill the P62-billion funding shortfall in the first year of implementation alone of the UHC program in 2020.

With the imminent enactment of the tobacco tax bill, Chua said the government is pushing for the passage of other tax reform bills, including the higher tax on alcohol beverages.

Chua said the finance department has proposed to impose an increase of P40 per liter on alcoholic drinks.

Other legislative proposals endorsed by the DOF are reforms in the corporate income tax and fiscal incentive system, property valuation and assessment, and capital income and financial taxation.

In the same Palace briefing, Camarines Sur 2nd District Rep. Luis Raymund Villafuerte said they hope to facilitate the passage of the President’s tax reform measures within the year. He said having a supermajority in Congress would be crucial in ensuring the approval of these reforms.

“Most of them really ano, of course, support the President’s priority agenda. Although kung mayroon silang concern, I think that can be threshed out with discussions,” he said.