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Senate approves proposed tobacco tax hike

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Excise taxes are designed more to curb consumption than to raise collections. -- BW FILE PHOTO

By Charmaine A. Tadalan
Reporter

SENATORS on Monday approved on third and final reading a proposal to increase excise taxes on tobacco products to P60 by 2023, a day before the 17th Congress ends.

Senators were still proposing amendments as of 7:30 p.m., but approved it by 7:45 p.m.

Earlier in the day, Senate President Vicente C. Sotto III said the Senate would take into account proposals of both chambers in introducing amendments to Senate Bill No. 2233.

“We are trying to thresh out all the proposed amendments today and hopefully at the end of the day we will be able to reach a consensus on how to go about it,” Mr. Sotto told reporters ahead of the plenary session on Monday.

“We expect that for this to be passed and enacted into law, we will ask the House to adopt the Senate version, so we have to be very careful with the Senate version and try to incorporate already all the ideas, not only from us, but also from the House of Representatives. So the period of amendments later will be very important.”




In a mobile phone message, he explained that there will be no need to convene a bicameral conference committee to harmonize versions if the House “adopts or accepts the Senate version.” Asked if the bill would secure final approval in Monday’s session, Mr. Sotto replied: “Hopefully yes.”

President Rodrigo R. Duterte on May 28 certified the measure as urgent, allowing lawmakers to approve it on second and on third reading on the same day.

Congress is supposed to adjourn today, although its calendar puts its end on June 7.

In its last version, the Senate proposed to increase tobacco excise tax to P45 in January 2020 from P37.50 currently; to P50 in January 2021; to P55 in January 2022 and to P60 in January 2023 and then by five percent every year thereafter.

Among major amendments proposed as of 5:30 pm, is to also tax heated tobacco and vapor products, which are not currently taxed. Approved so far was P10 rate per pack of heated tobacco and up to 10 milliliter of vapor products.

Its counterpart measure, House Bill No. 8677, approved on third and final reading in December 2018, proposed lower rates of P37.50-45 per pack in 2022, and by four percent annually thereafter.

Cigarettes are at present levied P35 rate per pack after Republic Act No. 10963 increased it to P32.50 from P30 in January 2018 and to P35 beginning July 2018. It is scheduled to go up to P37.50 in January 2020.

Presidential Spokesperson Salvador S. Panelo said Mr. Duterte can be expected to sign the bill as soon as it is transmitted to the Office of the President. “Siguro, I’m sure. If the President wants it passed, then necessarily the logic is he will sign it,” Mr. Panelo said in a briefing in Malacañan Palace on Monday.

The Department of Finance estimates the Senate version to generate an estimated P15 billion in revenues in the first year of the new law’s implementation, lower than the P30.1 billion targeted under its original proposal of abruptly raising sin tax on cigarettes to P60 per pack.

Members of the Philippine Medical Association (PMA) and the Philippine College of Physicians gathered in front of the Senate along with health advocates to push for SB 2233’s approval.

“We fully support the committee report of Senator Angara, which is P60 by 2023,” Dr. Ma. Encarnita B. Limpin, PMC Board member, told reporters.

“What is important is mapasa na po siya (that it is approved) by today, para po sa ganon (so that) before the end of the 17th Congress ay makuha natin ‘yung inaasam asam na pagtaas ng buwis ng sigarilyo (we achieve the increase in cigarette tax) primarily for the health objective and also to fund ‘yung Universal Health Care (law implementation).”

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