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Palace approves urgent certification for P60 tobacco tax

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PIXABAY

MALACAÑANG on Tuesday said President Rodrigo R. Duterte approved a proposal of the Department of Health (DoH) and the Department of Finance (DoF) to impose a P60 tax per pack of tobacco and P40 per liter of alcohol.

“The recommendation of the Department of Finance and [the Department of Health] is that this bill should be certified as urgent,” Presidential Spokesperson Salvador S. Panelo said in a briefing, referring to Senator Emmanuel D. Pacquiao’s Senate Bill No. 1599 that proposes to increase the cigarette tax to P60 per pack.

On alcohol, Mr. Panelo said the DoH and the DoF proposed to raise the tax to P40 per liter.

In a statement, Mr. Panelo said: “This is a key public health measure to reduce deaths and disabilities due to tobacco and alcohol consumption and, at the same time, a revenue measure to fund the universal health care program.”

The Tax Reform for Acceleration and Inclusion (TRAIN) law increased the excise tax on tobacco to P32.50 from P30 in January last year.

Senate Bill No. 1599, which Mr. Pacquiao filed in October 2017, is still pending with the Committee on Ways and Means.

Senator Joseph Victor G. Ejercito, chair of the Senate committee on health, filed a similar bill that sets the tax rate for cigarettes at P90 per pack.

The House of Representatives approved on third and final reading in December proposed measures increasing the excise tax on alcohol and tobacco products.

House Bill No. 8677 proposes to increase the excise tax on cigarettes by P2.50 annually until it reaches P45 per pack in 2022, and by 4% annually thereafter.

The bill states that the excise tax on cigarettes will be raised to P37.50 from P35 in July 2019; P40 in July 2022; P42.50 in July 2021; and P45 in July 2022.

On alcohol products, House Bill No. 8618 proposes to raise the excise tax on distilled spirits to 22% from 20% ad valorem tax on the net retail price (NRP) per proof and a specific tax rate of P30 per liter from P23.40 in 2019, which will then be increased by P5 every year until it reaches P45 in 2022. Beginning 2023, the tax rate will increase by 7% annually. — Arjay L. Balinbin