The bicameral (bicam) conference committee on Wednesday approved a measure increasing the excise tax rate on alcohol, heated tobacco, and vapor products that would purportedly generate P24.9 billion in revenues if enacted into law.
After being ratified by the Senate and the House of Representatives, the bicam report will then be submitted to President Rodrigo Duterte for signature.
Senator Pia Cayetano, chairman of the Senate ways and means committee chairperson, has been very vocal about her dismay over the rates agreed upon by the bicameral committee.
“As a health advocate, I cannot deny that I’m not satisfied because I have two roles—Increasing the tax for the purpose of Universal Health Care [UHC] but using the rates as a deterrent to the consumption of a product that is not health,” she said.
“If you would look at it, I think the health advocates would say, we hope its higher,” she said.
As a revenue measure, Cayetano said he was hoping for higher (rates) because if you will see my figures in the Senate originally, the collection for alcohol only is already P46 billion.
“But that is how democracy work. That is how we work as a bicameral house, so the figures we have are what they are and they will go a long way,” she added.
Cayetano and her counterpart Albay Rep. Joey Salceda said the bill would give around P24.9 billion in revenues if enacted into law.
Sin Tax Coalition co-convenor Dr. Anthony Leachon admitted compromise is always expected in sin tax lobbying since 2012.
“There’s always a watered-down version. Sen. Pia Cayetano fought for health all the way and not merely on revenues for UHC,” said Cayetano.
“We have repeatedly said that providing relief to consumers is better done through government spending than through tax exemptions,” said Leachon.
In this case, the recently passed UHC law is the instrument to provide not only subsidized but also free medicines for our people based on health technology assessment.
He said there was a need to strengthen UHC, including financing it through sin taxes.
But he noted that the Senate version contradicts this by reducing the revenue for UHC as it has let the weak features in the bill passed.
The Bicam report rates are as follows:
Fermented (Year-SpecificTax Rate): 2020-P35; 2021-P37; 2022-P39 2023-P41; 2024-P43-6 percent indexation thereafter.
Distilled (Year)-Specific Tax Rate: 2020-P42; 2021-P47; 2022-P52; 2023-P59
2024-P66; Plus 22 percent ad valorem, 6 percent indexation thereafter.
Wines (for both sparkling and still wines) (Year-Specific Tax): 2020-P50, 6 percent indexation thereafter.
E-CIGARETTES HTPs (Year-Specific Tax): 2020-P25; 2021-P27.50; 2022-P30; 2023-P32.50-5 percent indexation thereafter.
Salt Nicotine (Year-Specific Tax) 2020-P37; 2021-P42; 2022-P47; 2023-P52-5 percent indexation thereafter.
Free Base (Year-Specific Tax): 2020-P45; 2021-P50; 2022-P55; 2023-P60, 5 percent indexation thereafter.
Earmarking provision: 60% UHC 20% HPEP; 20% SDGs