The Department of Finance (DoF) on Tuesday vowed to “try its best” to convince Congress to make cigarettes more expensive and act on a new proposal imposing still higher excise tax on tobacco products.
According to Finance Secretary Carlos Dominguez III, in addition to putting an end to smoking, especially among teenagers, the revenues collected from the rate hike will fund the Universal Health Care program of the government.
“It’s still in the Senate. This thing doesn’t end until the President signs it. We’re there, we’re keeping at it. We hope that they will come up to what is good for the country,” Dominguez said.
House Bill 8677 provides for an increase in tobacco excise tax from the current P35 per pack 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. The rate will increase by four percent in July every year thereafter.
The DoF proposal supports the position of Rep. Angelina Tan to raise the tobacco excise tax to P60 per pack in 2019 and increasing it by nine percent annually thereafter.
“The society has to agree on what is more important: enough money for healthcare or favoring companies that produce products that damage health? That’s what society has to agree on, and that’s what the representatives in the legislature are supposed to reflect,” Dominguez said.
“Our revenues have to keep going up because we are supporting a lot of people who are getting sick from smoking. That was all the testimony. I was reading the summary of the testimonies, it’s overwhelmingly in favor of higher taxes for health reasons,” he added.
Likewise, Finance Assistant Secretary Antonio Joselito Lambino II said higher tax has proven to be both effective and beneficial in terms of discouraging cigarette consumption.
Lambino said the government considers the tax on “sin” products more of a health measure than a revenue tool meant to save Filipino lives.
Meanwhile, the PMFTC, a joint-venture company between Phillip Morris Philippines Manufacturing Inc. and Fortune Tobacco Corp. said they stand firm against any more tobacco excise increase.
“Our position submitted to Congress is unchanged. We believe any further increases in excise taxes on tobacco at this time is unwarranted,” they said.
“There is still a need to review the impact of the last increase under TRAIN 1 in terms of tax collection, revenue utilization, on the livelihood of farmers, jobs in the manufacturing sector and the rise of counterfeit cigarettes,” they added.