Senate Minority Leader Franklin Drilon on Thursday insisted revenues that would be raised under the proposed sin tax measure, which would impose higher taxes on tobacco products anew, should be exclusively and solely used to fund the Universal Health Care program and other health-related projects.
“I would propose that the increases in the excise tax on tobacco as a result of the sin tax that we are working on now should be devoted solely to the universal health program and benefit the entire country,” said Drilon, who expressed full support to the measure.
The Senate is expected to pass the measure before it adjourns next week. The bill was certified urgent by the President.
Drilon said that the funds to be generated under the new measure, estimated at around P15 billion, would not even be enough to support the UHC program.
Citing the Department of Finance’s report, Drilon said that the UHC program would need P257 billion for the first year of implementation, with P195 billion provided for in the General Appropriations Act.
“Given the huge funding requirement of the UHC program and other health needs of millions of poor Filipinos, we have to prioritize and make clear in the law where these new funds we expect to raise will go. The health of our people should be our number one priority,” Drilon said.
Drilon’s proposal would in effect freeze the entitlement to the sin tax law of tobacco-producing provinces under Republic Act 7171. Under the said law, local government units that produce Virginia-type cigarettes would receive 15-percent share of the tax collection.
The senator clarified, however, that the allocation due to these tobacco-producing provinces under the current law will not be affected.
Drilon also said there appears to be “inequitable and grossly disproportionate” in terms of the value of the Virginia leaf tobacco and native tobacco being produced by the provinces and their allocation under RA 7171.
A report by the Action for Economic Reforms based on the 2017 General Appropriations Act shows that while the value of tobacco production is at P3.8 billion, the earmarked funds amount to P14.4 billion under R.A. 7171 and P3.61 billion under R.A. 8240 or a total of P18.01 billion, he noted.
“Tobacco excise tax collection allocated for the tobacco-growing regions is more than four times bigger than the value of tobacco production in 2017,” Drilon said.
Yet, he lamented, the tobacco farmers remain among the poorest in our country today.
“I hope that this inequity will be addressed in the next Congress,” he added.
Drilon also cited a 2016 Commission on Audit Report, which shows the irregularities in the utilization of tobacco excise taxes under Republic Act 7171.
“This finding of COA is just the tip of the iceberg. I am sure that a deeper examination of these funds would reveal more,” he added.
It was Drilon who championed the sin tax reform law in 2012 that resulted in higher revenues for health programs and successfully decreased the prevalence of smoking incidence particularly among the youth.
Meanwhile, with only two session days remaining until the end of the 17th Congress, Action for Economic Reforms urged the members of the Senate to pass the increase in tobacco taxes no later than Monday.
During last Wednesday’s plenary session, the senators closed the period of interpellations on Senate Bill 2233. However, the bill will still have to go through the period of amendments during the next session on Monday, June 3, before it can be voted on and passed.
“There is a very high clamor for this reform, and we would like to once again appeal to the Senate President Vicente Sotto III and Majority Leader Juan Miguel Zubiri to continue to prioritize the deliberations on the tobacco tax measure in the Senate agenda, and shepherd the safe passage of the measure on Monday,” said AER researcher Arjay Mercado.
Zubiri said that there was a 90 percent chance that the measure would be passed before the end of the 17th Congress. Speaker of the House Gloria Macapagal Arroyo also sent a letter to the Senate President, stating that the House of Representatives have already agreed to adopt the version that the Senate agrees on.