A LOCAL labor leader said increasing the excise tax on alcohol and tobacco products, also called sin taxes, will encourage right spending of income among workers.
Wennie Sancho, secretary-general of General Alliance of Workers Associations (Gawa), said on Tuesday, January 8 the move would reduce vices and promote a healthy lifestyle among workers.
Sancho said for the workers, instead of spending the income for cigarettes and alcohol, they should have more savings for their family especially in these “difficult and trying” times.
“We support this move as alcohol and tobacco products could reduce the income of the workers,” he said, adding that non-spending for these “unnecessary” goods also reduces the clamor of workers on lack of income.
On Monday, January 7, President Rodrigo Duterte approved the proposal of the Department of Health and Department of Finance to raise the excise tax on alcohol and tobacco products to fund the government’s Universal Health Care (UHC) Program.
Health Secretary Francisco Duque earlier said the UHC Program would need a total funding requirement of P257 billion for the first year of its implementation.
For Finance Secretary Carlos Dominguez III, the increase in the current tobacco excise tax rates to levels that would effectively curb smoking.
In December last year, the House of Representatives approved on third and final reading House Bill (HB) 8677 on tobacco excise taxes and HB 8618 on alcohol taxes.
HB 8677 seeks to increase the tax on every cigarette pack from the current P32.50 to P37.50 in July 2019. It would go up further by P2.50 per pack every year from 2020 to 2022, and by another four percent annually in the succeeding years.
HB 8618, on the other hand, aims to raise the tax on beer and other fermented liquors from the current P23.50 per liter to P28 per liter starting in January, to P32 in 2020, P34 in 2021, and P36 in 2022.
HB 8677 is projected to generate P1.8 billion in additional revenues this year, while HB 8618 is estimated to raise revenue by P7.9 billion.
The Senate and the House of Representatives ratified also in December 2018 the universal health care bill, which aims to cover all Filipinos with health insurance while upgrading the government's medical facilities.
For the local labor group, the measure will further encourage consumers including workers to spend money wisely.
Sancho said a huge portion of the income of some workers go to vices, or unnecessary spending like alcohol and tobacco products.
Thus, with higher sin taxes, Sancho said they are optimistic that workers will prioritize the basic needs of their families.
He also urged assurance from the government that the revenues from higher excise tax on these products will really be spent for its intended purpose. (with reports from SunStar Philippines)