Senate panel to push higher tax on tobacco when session resumes

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THE SENATE Ways and Means committee will submit for plenary action a measure to raise the excise tax on tobacco products when Congress resumes session in May, even if there will be little time left by then to ensure enactment.

“While there is no consensus yet on the final tax rate, there is an agreement in principle to increase the excise tax on tobacco products in order to raise funds for the universal healthcare bill and substantially reduce the smoking prevalence among the youth,” committee chair Senator Juan Edgardo M. Angara said in a press release on Friday. “The committee report will be sponsored and deliberated on the Senate floor upon resumption of the session in May.”

The 17th Congress, now on a Feb. 9-May 19 break, will have only between May 20 and June 7 to approve any bill.

Compared to the prevailing excise tax rate of P35 per pack, Senate Bill No. 1599 proposes P60, SB 2177 proposes P70 while SB 1605 sets it at P90. House Bill No. 8677, which bagged final-reading approval on Dec. 3, provided an increase to P37.50 per pack.

Mr. Angara said a draft report is being prepared on the measure, which will be circulated among committee members for signing. The draft also increases penalties for violations “to give more teeth to the law.”

Malacañang has said that President Rodrigo R. Duterte would certify the tobacco tax hike bill as an urgent measure, meaning it can be approved on second and then on final reading on the same day, and not days apart as otherwise required by rules.

The committee conducted three public hearings in which members heard the positions of the health sector, tobacco-growing provinces, tobacco companies, government agencies and other sectors affected by the proposal.

The Department of Finance and the Department of Health (DoH) are pushing for the passage of the bill to boost funding of the universal healthcare program, which they said has a P40-billion funding gap. Doctors were generally supportive of the bill, saying that the measure will prevent smoking especially among the youth and the poor.

However, stakeholders in the tobacco industry warned that imposing additional taxes on tobacco products would harm the livelihood of tobacco farmers and would encourage smuggling. — CAA