Senate panel to wait for DOH plans before raising tobacco tax

by Reports from Leila B. Salaverria and Marlon Ramos, Philippine Daily Inquirer, Jan 30, 2019

The Senate ways and means committee wants to look closely first into the plans of the Department of Health (DOH) for implementing universal health care and how it used its previous budgets before determining how much it would increase tobacco taxes.

The level of the tax will depend on the figures from health officials, Sen. Sonny Angara, committee chair, told reporters.

“We’re looking at it not just from revenue side but from the spending side. We don’t want to waste funds. Our government agencies may just be asking for funds but can’t spend these,” Angara said.

Higher increase

The House of Representatives has approved a P2.50 per pack gradual increase on the excise on tobacco products, disappointing finance officials and health advocates.

The Senate is tackling proposals to increase the excise to P60 to P90 per pack.

Angara said the Senate’s recommendation could be higher than that of the House of Representatives.

The tobacco excise increase is proposed as a health measure as it is intended to discourage people from acquiring the habit of smoking.

At the same time, it is expected to generate revenue to fund the implementation of the expected universal health care law.

In a position paper it submitted to the Senate, Japan Tobacco Inc. (JTI) on Tuesday maintained that cigarette makers were open to accepting “reasonable and predictable tax increases” as it warned that raising the excise on tobacco would only worsen cigarette smuggling in the country.

Consumption decline

JTI noted that tobacco producers contributed P130 billion in excise to the government in 2018 despite the steady decline in cigarette consumption over the past several years.

JTI said the illegal trade of cigarette “flourished” when the government imposed higher excise on tobacco.

Angara plans to conduct another hearing on increasing the tobacco excise next week, and to sponsor the measure on the floor before Congress goes on break for the campaign period.

At the hearing, Health Secretary Francisco Duque said additional funds of P257.54 billion was needed for the universal health care law in 2019 because there was a P40-billion funding gap. —