Senate approves higher excise tax on tobacco products

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WITH 20 affirmative votes, zero negative vote and zero abstention, the Senate on Monday, June 3, 2019, approved on third and final reading a bill seeking to raise the excise tax on tobacco products.

Senate Bill 2233, which is sponsored by Senator Juan Edgardo Angara, was approved after a roll call vote on Monday.

"We'd like to congratulate the sponsor, Senator Sonny Angara, and all the authors, Senator JV Ejercito, Senator Sherwin Gatchalian and others. As well as the DOF, congratulations! They have funds for the health care measure," Senator Juan Miguel Zubiri said after the approval of the bill.

Proceeds from the higher excise taxes will be used to fund the Universal Health Care Act, which needs a total of P257 billion in the first year of its implementation.

This legislation, which President Rodrigo Duterte signed in February 2019, will provide Filipinos equitable access to quality and affordable health care services.

The Senate bill on higher excise taxes on tobacco products was certified as urgent by President Rodrigo Duterte on May 28. The House of Representatives passed a similar bill, House Bill 8677, in December 2018 yet.

Under this measure, the excise tax on tobacco products will increase to P45 per pack in 2020 and by P5 every year thereafter until the rate reaches P60 in 2023. Starting 2024, the rate will increase by 5.0 percent annually.

The Department of Finance (DOF) earlier said funding for the UHC program will be short by around P62 billion in 2020 because the Philippine Amusement and Gaming Corp. and Philippine Charity Sweepstakes Office can finance only P195 billion of the total requirement of P257 billion.

The higher excise tax rates are expected to bridge this funding gap, the Finance department said.

The budget for the UHC program is projected to grow at an average of P11 billion to P12 billion per year, amounting to a five-year total of around P1.44 trillion by 2024. (MVI/SunStar Philippines)


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