FINANCE Secretary Carlos Dominguez III has made an 11th-hour appeal to senators to speed up the approval of a new “sin” tax reform law.
If approved, the law would impose higher excise tax rates on alcohol and tobacco products to help fill the massive funding gap for the Universal Health Care (UHC) program and ensure affordable and quality health care for every Filipino family starting next year, the Department of Finance said in a statement.
Dominguez also urged senators in a recent meeting with them to continue pushing fiscal reforms in the incoming 18th Congress to give the Philippines “a good chance” of securing the much-coveted single “A” grade for the country’s long-term sovereign credit rating within two years.
A single “A” investment grade credit rating, Dominguez said, will not only benefit the government and private sector investors through lower borrowing rates when they invest in projects for economic expansion, but will also mean ordinary Filipinos will also get to pay lower interest rates on their loans.
“All of these will translate into larger investments and more jobs for Filipino workers. So, you see, it is not just about getting an upgrade. It is about upgrading everyone’s life,” Dominguez said during his meeting with Senate President Vicente Sotto III and the other senators following last week’s resumption of session of the 17th Congress before its adjournment.
During that meeting at the Senate, Dominguez described the 17th Congress as “among the most productive and hardworking that I have ever seen.”
The efforts of the 17th Congress in passing crucial measures such as the Tax Reform for Acceleration and Inclusion (Train) Law and the Rice Liberalization Law, among others, will be judged by history “as game-changing reforms that placed the Philippines on a higher growth path,” Dominguez noted.
“Among others, these game-changing reforms led to a credit rating upgrade from Standard and Poor’s. The upgrade, from triple B to triple B plus, is a strong vote of confidence in the Duterte administration’s reform agenda,” Dominguez said. “This would not have been possible without the strong support of the Congress. Again, my sincerest appreciation.”
Dominguez said another game-changer, the UHC law sponsored and steered to passage by Sen. JV Ejercito, will benefit every Filipino as it is a “first-class” law, but it will only be a “third-class” measure if implemented with insufficient funding.
Government funds are not enough to fulfill the financing requirements for the UHC law beginning 2020, he told senators.
Dominguez earlier pointed out that from 2020 to 2024, all current sources of government funding can cover UHC at around P200 billion annually, while the cost of the program will continue to grow to as much as P1.44 trillion during the first five years of implementation.
Increasing the excise taxes on sin products to at least P60 per pack for cigarettes and at least P40 per liter for alcohol products would provide the government the resources it needs to fill the funding gap for the full and proper implementation of the UHC law, Dominguez said.
Without adjusting the current “sin” taxes to at least these rates, which was proposed by Sen. Manny Pacquiao, Dominguez said the cumulative funding gap by 2024 will reach P426 billion.
“With less than three session weeks left, I appeal to the Senate to prioritize increasing excise taxes on tobacco and alcohol. This reform is already in an advanced stage, so there is just enough time to deliberate, pass, and ratify the measure,” Dominguez said.
He said President Duterte is ready to certify the new “sin” tax reform bill as urgent once the ways and means committee report is signed by the Senate.
The 17th Congress reopened on May 20 and will hold sessions until June 5 before its adjournment on June 6 to make way for the new set of lawmaker-members of the next Congress. (PR)