Senate President Pro Tempore Ralph Recto said Thursday the Department of Health had suffered a shortchange of P28.3 billion in tax shares which resulted in budget anemia.
Because of this, Recto said the DOH and PhilHealth should not be begging for funds. They should automatically be getting what is due them from the TRAIN Law based on Republic Act 11346.
In language that is clear and concise, he said RA 11346 mandated that 50 percent of excise tax collections on sin and soda products shall be earmarked for health.
The 50 percent health share shall, in turn, “be allocated and used exclusively” in the following manner: 80 percent to the PhilHealth for Universal Health Care, and 20 percent to the DOH’s Health Facilities Enhancement Program and medical assistance program.
Senate Ways and Means committee chairperson Pia Cayetano delivered her sponsorship speech on the proposal to raise taxes on alcoholic beverages, heated tobacco products, and vapor products.
Senate Bill 1074 proposes to align the tax rates of HTPs and vape with that of traditional cigarettes at P45 beginning next year.
Cayetano noted that raising the tax on HTPs and vape is crucial in discouraging the use of these products, especially among younger users.
“The science of vaping is all very new, and while experts around the world are still studying this, we have already seen and heard an avalanche of news of people who died because of lung failure in the United States. For the sake of our children, we must regulate and tax e-cigarettes at parity with regular tobacco products. Vaping is not cool, especially when it leads our kids to the path of new addictions,” Cayetano said.
For alcoholic beverages, Cayetano’s bill significantly increases the tax on distilled spirits from P23.5 to P90 per proof liter with a 20 percent ad valorem tax starting next year.
The tax will be increased to P100 in 2021, P110 in 2022, and P120 in 2023, followed by 10 percent annual increases from 2024 onwards.
Meanwhile, the tax on fermented liquors and alcopops would be raised from P25.4 to P45 per liter, with a similar increase of P 10 per year until 2023, and 10 percent annual increases from 2024 onwards.
Finally, a specific tax of P600 will be imposed on sparkling wines, and a specific tax of P43 on still and carbonated wines beginning 2020, with an annual increase of 10 percent.
Sin Tax Coalition co-convener Dr. Anthony Leachon urged the other senators to support this measure, and join the fight to ensure better health outcomes for our countrymen.
Meanwhile. Cayetano said that aside from discouraging the consumption of sin products, it will also serve as a critical source of funding for the Universal Health Care Law.
“With around P40-50 billion incremental revenue to be generated from this bill, we are getting closer and closer to implement the UHC, a law that will benefit the future generation. Our higher calling is to improve people’s lives. The choice we make today can lead to happier and healthier households in the future,” Cayetano added.
On the other hand, Recto also related that in 2018, total collections from alcohol was P68.8 billion; from tobacco P136.08 billion; from sugar sweetened beverages, P38 billion, or a total of P242.8 billion.
Thus, the combined DOH-PhilHealth 50 percent should be P110.9 billion, net of other deductions. Following the 80-20 sharing, P88.72 billion should go to PhilHealth, and P22.18 billion to DOH-HFEP and medical assistance.
But under the proposed 2020 national budget, PhilHealth is getting P67.3 billion, or P21.42 billion below what its share should be.
And as for the DOH, its HFEP is earmarked P5.9 billion, and its Medical Assistance Program P9.4 billion, or P6.9 billion short of what the law guarantees.