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Tobacco tax hike to raise P126B – DoF 

June 06, 2019

Higher taxes on tobacco products could add P126 billion to the government’s coffers by 2024, the Finance department said on Wednesday after Congress fast-tracked the approval of a measure now awaiting President Rodrigo Duterte’s signature.

Cigarrette vendor in kamuning, Quezon City is one affected by higher taxes on tobacco products. File Photo

Estimates provided by Finance Undersecretary Karl Kendrick Chua showed incremental revenues of P15 billion starting 2020, P22 billion in 2021, P26 billion in 2022, P32 billion in 2023 and P31 billion in 2024.

Approved unanimously by senators on third and final reading on Tuesday, Senate Bill 2233 provides for a higher P45 excise tax per cigarette pack next year, followed by a series of P5-hikes until the rate reaches P60 in 2023 and a 5-percent annual increase thereafter.

With the 17th Congress set to bow out this week, the House of Representatives adopted the Senate version of the bill, skipping the need for bicameral conference committee discussions.

The proposed increase follows adjustments implemented last year under the Tax Reform for Acceleration and Inclusion Law. The per pack rate currently stands at P35.

Finance Secretary Carlos Dominguez 3rd thanked lawmakers for the passage of the bill, whose revenues have been primarily earmarked for the Universal Health Care (UHC) program.

“I think we made history. I think it is only in this administration that tobacco taxes were raised twice,” he said in a statement.

While the projected revenues would be lower because of the staggered nature of the tax increase, it would still enable the Duterte administration to better implement UHC, Dominguez said.

The program’s funding requirement has been estimated to hit as high as P1.44 trillion from 2020 to 2024.

For 2020 alone, the Finance department said P195 billion in UHC funding would be covered by the national budget, the Philippine Amusement and Gaming Corp. and the Philippine Charity Sweepstakes Office.

Credit belongs to : www.manilatimes.net

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