Store owners believe demand for cigarettes will not wane

CEBU. Sari-sari store owners are divided whether they will continue selling cigarettes at a higher price after the Senate approved the sin tax bill on cigarettes. (SunStar File)

AFTER the Senate approved the bill raising excise taxes on cigarettes, sari-sari store owners are divided whether they will continue selling cigarettes even at a higher price.

Elizabeth Cabahug, who owns a sari-sari store in Tayud, Liloan, said that even if the prices of cigarettes went up, she would still continue to buy these for her customers.

“Even if it’s more expensive, smokers will still buy them. So there’s still demand, and that’s why we will continue selling cigarettes,” she told SunStar Cebu.

Imelda Pagobo, who sells beer and soft drinks, said she was discouraged from selling cigarettes.

“You need to have a higher income to buy cigarettes because it is so expensive nowadays,” she said.

With 20 affirmative votes, zero negative votes 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 Sen. Juan Edgardo Angara, was approved after a roll call vote just four days before the 17th Congress is set to adjourn sine die.

“We’d like to congratulate the sponsor, Sen. Sonny Angara, and all the authors, Sen. JV Ejercito, Sen. Sherwin Gatchalian and others. As well as the DOF (Department of Finance), congratulations! They have funds for the health care measure,” Sen. 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 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.

Despite this, a call center agent who requested anonymity, said she will continue smoking because it relaxes her.

“It’s psychological. We just want to feel relief from the stress and boredom in our work. And I still feel addicted to smoking,” she told SunStar Cebu.

The 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 of SunStar Philippines)


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