Lawmaker wants bill curbing illicit tobacco trade prioritized
THE GOVERNMENT must prioritize a measure that aims to curb the illicit tobacco trade in the country in order to keep public health in check and minimize its revenue losses, amounting to P60 billion in 2023 alone, a congressman said.
“The government should prioritize the measure to curb illicit tobacco trade [and] to minimize its adverse effects to public health,” Albay Rep. Jose Maria Clemente S. Salceda said during a House Ways and Means Committee hearing last week.
Illegal tobacco trade is harmful to public health as well as government revenues as it makes it affordable and accessible to consumers without undergoing proper trade avenues.
The Sin Tax Reform Act of 2012 stipulates that at least 80% of the generated revenue from the law should be allocated for the universal health care program under the Philippine Health Insurance Corporation (PhilHealth).
“Illicit tobacco trade is particularly detrimental to public health,” the explanatory note of House Bill (HB) No. 10329 stated. “[It] makes cheap cigarettes accessible to the consumers… and leads to losses in tobacco tax revenues, which… are earmarked for the implementation of the Universal Health Care Law.”
Tobacco-related diseases cost the government at least P188 billion yearly in public health expenses, Mr. Salceda said during the panel hearing.
Authored by Mr. Salceda, HB No. 10329 requires tobacco companies to register their tobacco machinery and ingredients to the government and introduces a “track-and-trace” for the tobacco value chain, allowing the state to monitor the flow of tobacco-related goods in the country.
“This is a remedial legislation aimed to eliminate revenue losses from the illicit tobacco trade,” he said. “We aim to reap the benefits provided under our sin tax law to immediately supplement the funding for our healthcare system.”
The country’s sin tax is a “landmark” legislation as it sought to support further the country’s healthcare system, Adolfo Jose Montessa, Action for Economic Reforms representative, told the House panel.
“Our comprehensive approach, through the six tax reform, not only improved health outcomes but also strengthened the financial sustainability of our country’s healthcare system,” he said.
The combined budget for the Department of Health (DoH) and PhilHealth increased by 422% due to the sin tax law, he added.
However, the significant “gains” from the tax law are threatened by the uptick in the illicit trade of “sin” products. “In 2023, excise tax collections declined to P291.7 billion,” Mr. Montessa said. — Kenneth Christiane L. Basilio