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House hearing bills on P40-P60 per pack increase in cigarette tax

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THE HOUSE WAYS and Means Committee on Monday continued deliberations of the bills raising excise taxes on tobacco products to P40 to P60 per pack from P35, which is intended to fund Universal Health Care (UHC).

“We support this important reform to raise tobacco excise taxes so we can do two things: number one, fund the Universal Health Care (act), which is an important upcoming law, which remains underfunded; and second, to prevent the youth and the poor from wasting their lives in the future,” Finance Undersecretary Karl Kendrick T. Chua told the panel.

The Committee was tackling House Bills 4575 and 6648, written by Albay 2nd district Rep. Jose Maria Clemente S. Salceda and Quezon 4th district Rep. Angelina D.L. Tan, M.D., respectively.

House Bill 4575 proposed to increase excise tax to P40 to 60 within five years of implementation and a 5% annual increase thereafter; while House Bill 6648, which embodies the DoF proposal, proposed to increase it to P60 with an annual increase of 9%.

Mr. Salceda’s version calls for 80% of the incremental revenue to be earmarked for the UHC and 20% to provide assistance to farmers.

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Ms. Tan proposed to allocate 75% of the revenue for the UHC; with the remaining 25% to be divided between a government program to eliminate tuberculosis, which is to receive 10%; another program to prevent and control HIV/AIDS, receiving 10%; and a third program of health promotion, receiving 5%.

Stakeholders, meanwhile, asked the panel as well as the Finance and Health Departments to reconsider the additional excise taxes on tobacco products, taking into account that enactment of the Tax Reform for Acceleration and Inclusion (TRAIN) Law, which imposed higher taxes on tobacco products.

“The PMFTC (Phillip Morris Fortune Tobacco Corp. Inc.) supports the retention of the current excise tax rates which were passed only last December 2017. We believe before new proposals increasing excise tax rates are entertained the government must give an opportunity to first review the implementation of the existing rates,” Patrick Muttart of PMFTC told the panel.

“We believe that such a review would show an additional increase in excise rates at this time would create a challenge that would have a profound impact on the entire tobacco value chain,” he added.

Universal Leaf Philippines Inc. President Wynston P. Uy said: “I think it’s only fair that the government collects properly from the tobacco but… (we’re) forgetting other sin products that also do have harm to society.” — Charmaine A. Tadalan

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