The approval by Congress of a bill to impose higher excise taxes on cigarettes will make the Philippines one of the healthiest countries in Asia by 2040, Health Secretary Francisco Duque said Wednesday.
He said the new law would fulfill President Rodrigo Duterte’s twin goals of keeping all Filipinos healthy and providing the sick quality and affordable health care.
“This is not a rocket science. When the prices of cigarettes and alcohol are higher, it is harder especially for the youth to buy these very harmful products. We can only reduce consumption by making these ‘sin’ products less affordable to consumers.”
He said revenues from sin taxes provide the much-needed financing to help reform the health sector, deliver PhilHeatlh coverage to poor Filipinos, scale up the Department of Health’s non-communicable disease prevention services and extend help to the country’s tobacco farmers.
President Rodrigo Duterte signed the UHC program into law last February to ensure a better, healthier life for Filipinos, which is in line with his agenda to build a healthier nation.
The reforms provided under the UHC Law, Duque said, will ensure health insurance coverage and expand benefit packages particularly for outpatient consultation and medicines for all Filipinos.
But the government funds are not enough to fulfill the financing requirements beginning 2020. He said this was the need for the new sin tax increase.
Dr. Antonio Dans of the UP College of Medicine said calculations show that the increase would ensure there would be no more rise in the total number of smokers in the country until at least 2022.
This was echoed by former PhilHealth director Anthony Leachon who said raising the taxes on cigarettes is known to be one of the most effective measures to lower smoking prevalence.
Dans said multiple studies have shown that the top 10 causes of death as listed by the Philippine Statistics Authority are all linked to smoking cigarettes, a deadly product.
The use of this deadly product, Leachon said, has led to debilitating disease and even death for many Filipinos.
Dans and Leachon, the lead conveners of the Sin Tax Coalition, have been leading health advocates in the call to stop smoking and calling on lawmakers to raise sin taxes to address the funding shortfall in the implementation of UHC.
They commended lawmakers who have stood their ground in putting the health and welfare of the Filipino people above any interests, particularly in a product that causes nothing but harm to users and non-users alike.
Senator Juan Edgardo Angara, chairman of the Senate ways and means committee, which heard the bills on the proposed increase in cigarette taxes filed by Senators JV Ejercito, Sherwin Gatchalian, and Manny Pacquiao asserted that the tax increase would be crucial in bridging the P62-billion funding gap for the first year of UHC implementation.
As one of the principal authors of the Tobacco Tax Increase, Pacquiao said he was overjoyed that their efforts have finally paid off.
“I am confident that this measure will curb the population of smokers and eradicate, if not reduce, its harmful impact on the health of our citizenry,” he said.
He said aside from the health benefits, the law would also generate additional revenues that will fund the UHC implementation. A revenue of P15 billion is expected the year following its implementation and P140 billion until 2023.
Senate Bill 2233 adopted by the House on Monday proposes an increase of P45 to P60 per pack in excise tax beginning next year to 2023 and then 5 percent yearly hike effective Jan. 1, 2024.
The scheduled increase would be as follows: P45 per pack increase effective Jan. 1, 2020 until Dec. 31, 2021, P50 in January 2021, P55 per pack in January 2022 and P60 per pack effective Jan. 1, 2023.
Also, an excise tax of P10 per pack of 20 units will be imposed on heated tobacco products, while vapor products will have a P10 excise tax for every 10 milliliters starting Jan. 1, 2020. These rates will increase by 5 percent annually beginning January 2021.
Congress also acceded to a clamor among House members for a 70-30 sharing of the proceeds in favor of tobacco-producing cities and municipalities.
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