MANILA – The Senate ways and means committee will hold its next hearing on the proposal seeking to increase the excise tax on tobacco products today.
Senate Bill 1599, filed by Sen. Emmanuel “Manny” Pacquiao, seeks to increase the current cigarette tax rate from P30 per pack to P60.
This is aside from the annual increase of 9 percent from the current 4 each percent increase in excise tax per year.
Sen. Sonny Angara, committee chairman, said the panel would look into the capacity of the Department of Health in implementing the universal healthcare as a basis of the final amount or rate for the tobacco taxation.
“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 in a statement Friday.
However, for Senate President Vicente Sotto III, there is “no chance” next week for the tobacco tax bill to reach plenary, noting that it could be tackled once sessions resume.
In December last year, Finance secretary Carlos Dominguez III pushed for the increase in the current tobacco excise tax rates to levels that would effectively curb smoking and also help supplement funds for the Universal Healthcare program.
Health secretary Francisco Duque earlier said smoking prevalence in the country would be lowered from 21.6 percent of the population down to a target of 15.7 percent.
Several groups appealed to senators against further increasing the tobacco excise tax and said grave consequences outweigh any gains.
Federation of Philippine Industry Chairman Jesus Arranza said their group does not support any more tax increases for tobacco, citing an Intellectual Property Office of the Philippine report that an estimated P20 billion worth of cigarettes were seized in 2018.
Arranza said the proliferation of these non-taxed items was due to high prices driven by taxes.
“We fear that the high tax proposals under Senate Bills 1599 and 1605 could aggravate the situation and lead to even higher incidence of illicit trade,” Arranza said in a position paper submitted to the Senate ways and means committee.
PhilTobacco Growers Associated president Saturnino Distor said taxes on tobacco products have been increased seven times already in the last five years.
Distor said farmers cannot take any more increases. “We are struggling and a lot of us already lost their livelihood.”
In another position paper submitted to Angara’s committee, governors from tobacco producing provinces in northern Philippines said that almost 3 million Filipinos dependent on the tobacco industry are suffering from the adverse impact of higher taxes.
“From 2013, tobacco crop production has dropped by more than 20 million kilos or roughly 40% of the annual yield. This represents a significant drop in the household income of tobacco farmers,” the governors said.
The local chief executives who signed included Ilocos Norte Gov. Imee Marcos, Ilocos Sur Gov. Ryan Singson, La Union Gov. Francisco Emmanuel Ortega and Isabela Gov. Faustino Dy.(PNA)
