Final battle on tobacco taxes waged in Senate

By Butch Fernandez, Business Mirror, Jan 30, 2019

SENATORS are firming up a consensus on a higher tobacco tax ranging from P60 to P90 per pack. But, in an indication of how fiercely the tug-of-war between pro- and anti-tobacco tax hike is affecting lawmakers, the Senate Ways and Means Committee scheduled another public hearing next week.

“We still need more information to determine the [upward] rates,” Sen. Juan Edgardo Angara, the committee chairman, told the BusinessMirror after presiding over Tuesday’s hearing on at least four related Senate and House bills—all proposing increasing the excise tax rates on tobacco products.

Angara added he will “call another hearing next week” on the pending proposals to enable the committee to forge an agreement and fix the higher tobacco tax rate that will be submitted for plenary consideration and final approval.

As the Ways and Means hearing was under way, nongovernment organizations pushing for higher tobacco excise taxes to fund the universal health care mobilized in areas near the Senate to pressure lawmakers into approving another round of rate hikes.

Those opposing the tax hike presented their own compelling reasons. The day before, five governors of tobacco-producing farmers and 23 tobacco farmer groups presented separate appeals strongly urging senators to defer the next-round hikes, noting how excise taxes on tobacco have been increased successively in the past five years.

The governors said their constituents were reeling from the undue “burden” imposed by policy and lawmakers, even as other agricultural commodities —or other so-called sin products like alcohol—were not taxed as much.

Separate bills

Under consideration in the Senate Ways and Means Committee are separate bills calling for higher tobacco tax rates, filed by Sen. Joseph Victor Ejercito, P90; Sen. Sherwin T. Gatchalian, P70 and Sen. Emmanuel Pacquiao, P60 per pack. The House counterpart version of the tobacco tax bill was pegged at P37.50 per pack.

This developed as Angara’s panel was informed that the Department of Finance was concerned about raising an additional P30-billion revenue to bankroll the Duterte administration’s Universal Health Care program.

However, Gatchalian, chairman of the Committee on Economic Affairs, suggested that “the trick is to raise it [tobacco tax] as much as possible,” adding that “we want the optimum to reduce the funding gap.” In the same hearing, Finance Undersecretary Karl Kendrick T. Chua informed senators that the DOF was “also looking at alcohol products to fill the funding gap.”