President Rodrigo Duterte will sign this week a proposed law that will increase excise taxes on tobacco products, a finance official said Wednesday.
Finance Undersecretary Karl Kendrick Chua said the Chief Executive will sign Senate Bill 2233 which seeks to increase the excise tax on cigarettes by P5 every year with the inclusion of heated tobacco products and vapor products in its coverage.
“It is an enrolled bill that was transmitted last June 27 to Malacañang. That means it will lapse into law on July 27. And my understanding is it is ready for signature by the President,” Chua said to Malacañang reporters.
“I was told it would be signed this week because that is a priority measure certified urgent by the President in the previous Congress and mentioned by the President in the Sona,” he added.
Certified urgent by the President, the excise tax on cigarettes is expected to bring P15-billion revenue that will boost funding for the Universal Health Care Law and health programs that will be determined by the Department of Health.
Revenues will also be allocated and divided among the tobacco-producing provinces.
The increase in tobacco excise tax is part of the administration’s second tranche of tax reform.
If signed, it will increase tax rates of cigarettes per pack from the current P35 to 45 next year, to P50 per pack in 2021, P55 per pack in 2022, and P60 per pack starting January 1, 2023.
From zero excise tax, heated tobacco products or e-cigarettes will be levied P10 per pack beginning Jan. 1, 2020 and 5-percent yearly increase effective Jan. 1, 2021.
For vapor products, individual cartridge, refill, pod or container of its liquid solutions or gel will be charged P10 per 10 milliliters. If the product being sold is more than 50 ml, it will be charged P50 excise tax plus P10 per additional 10 ml.
The rates imposed on vapor products will also be increased by 5 percent every year effective Jan. 1, 2021.