Dominguez on new ‘sin’ taxes: Good, but not enough for universal health care

Finance Secretary Carlos G. Dominguez III welcomed Congress’ approval of new excise on alcoholic drinks and e-cigarettes, but expressed lament that levels were not what he wanted which would have been enough to fund universal health care starting in 2020.

Dominguez expressed fear that there would be a shortage of funding for the Universal Health Care Act because new tax rates approved by Congress on alcoholic drinks and e-cigarettes fell short of what the Department of Finance (DOF) had proposed.

The version passed, however, would still generate up to P24 billion in fresh revenue in the first year of the new tax law’s implementation in 2020.

The DOF proposal had been projected to raise up to P36.5 billion next year, much higher than projected take from what Congress approved.

“When you go into the legislative process, you don’t get everything you want,” Dominguez said. “But it’s certainly better than the alternative of doing nothing,” he said.

“People say, ‘I’m not going to get what I want, so I’ll not do it’—that’s not the right attitude,” he said.

“The attitude is, we go and do our best. Maybe it’s not exactly what we want, but the wisdom of the legislature is to be respected,” Dominguez said.

He said he appreciated what Congress had done “because these actions are certainly a lot better than past legislatures.”

He, however, admitted that lower revenue from what Congress passed may lead to a funding gap for the universal health care program which seeks to give health care to every one regardless of economic class.

“I think, just from my opinion, most likely we will not quite hit the total amount that will be required,” Dominguez said.

“But again, we’re just talking about estimates now—we have to look at how it will actually work out,” he added.

Dominguez was nonetheless hopeful that the move to raise taxes on “sin” products and unhealthy foods such as sugar-sweetened beverages would also redound to lifestyle choices.

“Maybe, who knows, Filipinos will actually get into the habit of eating better, smoking less and drinking less, so that the total cost of universal health care is going to go down,” said the finance chief.

“That is really very important—you have to take care of yourself first,” Dominguez said.

“We want to make sure these taxes are aimed at promoting or influencing people’s daily habits. I’m not sure that we can be 100-percent successful, but that’s really the idea of sin taxes,” Dominguez added.

Edited by TSB