PRESIDENT Rodrigo Duterte has signed into law a measure increasing excise taxes on tobacco products.
This was confirmed by Executive Secretary Salvador Medialdea in a text message.
"To address the urgent need to protect the right to health of the Filipino people and to maintain a broader fiscal space to support the implementation of the Universal Health Care Act, the President has signed into law [House Bill] No. 8677/ [Senate Bill] No. 2233 Increasing the Excise Tax on Tabacco Products," he said.
The Palace has yet to release a copy of the newly-signed law.
Under the tobacco excise bill, the excise tax on tobacco products will increase to P45 per pack in 2020 and will go up by P5 every year until it reaches P60 in 2023. Starting 2024, the rate will increase by 5.0 percent annually.
Cigarettes are currently levied P35 per pack as provided by Republic Act 10963 or the Tax Reform for Acceleration and Inclusion Act (Train).
The higher excise tax rates will be used to fund the implementation of the Universal Health Care (UHC) Act, which was signed into law last February 2019.
The Department of Finance (DOF) earlier said the UHC Law would require a budget of P257 billion in its first year of implementation in 2020.
However, only P217 billion was appropriated for the health care program under the 2019 budget.
The P40-billion funding gap for universal health care program is expected to be financed by the proceeds from the higher excise taxes on tobacco.
The budget for the UHC 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.
The tobacco excise tax bill was ratified by the 17th Congress shortly before it adjourned sine die on June 4, 2019 in a last-minute act to achieve the legislative agenda of President Rodrigo Duterte. (Ruth Abbey Gita/SunStar Philippines)