Hike in tobacco tax certified as urgent

President Rodrigo Duterte has agreed to certify as urgent a bill that would increase the excise on tobacco and alcohol products.

The President approved the recommendation of the Department of Finance (DOF) and the Department of Health (DOH) to support the bill, which Sen. Manny Pacquiao filed in 2017.

Presidential spokesperson Salvador Panelo said the President agreed to certify Senate Bill No. 1599 as urgent during Monday night’s Cabinet meeting, the first for 2019.

Bill to amend RA 10351

“The recommendation of the DOF and the DOH is that this bill should be certified as urgent because under the proposal, the tax on tobacco would be raised to P60 per pack, while on the part of alcohol, it will be P40 per liter … So the recommendation is that the bill should be passed and signed into law,” Panelo told a press briefing.

Pacquiao’s proposed bill would amend Republic Act No. 10351, or the Sin Tax Reform Act of 2012, by increasing the current unitary tax rate of P30 per pack, and the annual tax of 4 percent.

‘Worrisome’

The Phil Tobacco Growers Association, however, said they found it worrisome for the government to consider another round of tax increases for tobacco.

“Cigarette taxes have gone up seven times in the last five years. This has directly impacted our production and caused the displacement of a lot of farmers,” Saturnino Distor, the group’s president, said in a statement.

He said that tobacco production went down from 68 million kilos in 2013 to 48 million in 2017.

Revenue, health measure

The Palace explained that the higher tax on tobacco products was both a revenue and a health measure.

“It’s also a revenue measure to finance items that need funds, like medical needs. Apart from this, it’s a health measure to dissuade people from excessive smoking,” Panelo said.

Pacquiao said higher taxes on tobacco and alcohol products could generate P60 billion to P70 billion for the government.