Palace certifies ‘urgent’ higher tobacco tax bill

Malacañang has certified as urgent the proposed law imposing higher excise taxes for tobacco products.

Justice Secretary Menardo Guevarra, who has been designated officer-in-charge of the Office of the President until Saturday (June 1) while President Rodrigo Duterte is in Japan for an official visit, confirmed that the certification of urgency for Senate Bill 2233 has been signed.

The Senate is reportedly set to approve the bill by Monday, June 3,

Proponents of the tax measure expressed hopes to end the plenary debates on the bill and pass it on third and final reading to be able to immediately transmit their version of the sin tax bill to the House of Representatives for its members to review and vote for its adoption.

READ: Sin tax bill faces crucial week

They said Congress has no more time for a bicameral conference committee meeting to settle the disagreeing provisions of the Senate and House’s respective proposals.

Lawmakers only have four remaining session days to ratify the final version of the proposed measure and enroll it for the President’s approval as the 17th Congress is scheduled to adjourn on June 7.

SB 2233 proposes a staggering increase in the excise tax per cigarette pack from 2020 to 2023.

The bill recommends a starting rate of P45, or P10 in the first year of implementation, which will be followed by an annual P5 increase until the rate reaches P60.

After this, the tax would automatically increase by 5 percent annually.

The House version, House Bill 8677, on the other hand, pegged the tobacco tax hike at P37.50 to P45 per pack until 2022, which would increase by 4 percent every year thereafter.

Meanwhile, Assistant Secretary Tony Lambino said the Finance department is hoping for the passage of the new sin tax before the 17th Congress adjourns on June 7.

“We have a very good chance at passing the measure,” he said at a public forum Tuesday.

“We are being guided by the senators. We are here to support them. Whatever data and analysis they would be needing, we are just here to provide [these to] them 24/7,” Lambino said.

Senate Majority Leader Miguel Zubiri also expressed hope that the bill would be ratified.

“We hope to transmit it to the House on Monday. We hope the House [will] adopt the Senate version so there would no longer be a bicam,” Zubiri said.

Health advocates, meanwhile, asked Senator Richard Gordon to recuse himself from tobacco tax deliberations due to conflict of interest after admitting that the Philippine Red Cross, which he heads, has been accepting money from the tobacco industry.

“The secretary-general of the Red Cross and I had quarrels over how to use the money from the tobacco companies. I said, I’m not going to advertise them, but I’ll get the money. Why can’t we use it to help people out? I’m sure I’m being wrong there, but I’m being practical,” Gordon said during Tuesday’s plenary session.

Action for Economic Reforms researcher Arjay Mercado emphasized that Gordon’s statement was a clear admission of conflict of interest and that he must no longer be involved in the deliberations on the measure.

They commended Senator Juan Edgardo Angara for sponsoring the measure to increase tobacco taxes during Monday’s plenary session.

“We are truly grateful to Senator Angara for sponsoring the tobacco tax increase in the Senate. By heeding the call of the health advocates, Senator Angara has proven himself to be a true health champion, and he can be assured that the advocates will support him all the way,” said Anthony Leachon, former independent director of the Philippine Health Insurance Corp.

Leachon also welcomed the strong support given by the Senators Manny Pacquiao, Sherwin Gatchalian, JV Ejercito, and Risa Hontiveros, all of whom co-sponsored the measure.

In his sponsorship speech, Angara explained that the measure would be key to discouraging Filipinos from smoking and generating revenue to help bridge the current P62-billion funding gap for the first year of implementation of the Universal Health Care Law.

Meanwhile, the DOF refuted one of Gordon’s main concerns, which was that increasing the tax rate would lead to a corresponding increase in the level of cigarette smuggling.

Wynona Galvez from the Youth for Sin Tax Coalition said increasing the tax on cigarettes is a proven measure to significantly decrease smoking prevalence among the youth.

“Data from the National Nutrition Survey show that the total number of smokers among the youth decreased by around 40 percent from 2008 to 2015. This can be attributed to Sin Tax Law of 2012, which made cigarettes significantly less affordable for the youth. Our legislators must, therefore, ensure that we are able to continue this trend by implementing substantial increases to the tax on cigarettes, and we have a very good opportunity to address this before the end of the 17th Congress. We are counting on our legislators to safeguard our future by passing the tobacco tax increase,” Galvez said.

A recent Pulse Asia survey revealing that three out of four Filipinos believe that the tax on tobacco products must be increased.

Rep. Luis Raymund Villafuerte of Camarines Sur on Tuesday appealed to the Senate to approve a new sin tax law, saying this would discourage smoking and help fund the Universal Health Care program.

He pointed out that the UHC will be useless if the Congress will not ensure adequate funding for the provision of free health care.

The House of Representatives approved its version of the sin tax bill last year.

The Department of Finance said some P258 billion would be needed in the first year of UHC’s implementation in 2020.

Villafuerte said P195 billion can be taken by the government from its current funding sources but without a new sin tax reform law, UHC will be left with a funding gap of around P62 billion in the first year alone.

READ: ‘Passage of ‘sin tax’ bill faces rough sailing’

READ: Anti-smoking drive aims to boost 'sin tax' revenue

Topics: tobacco products , Menardo Guevarra , Office of the President , Rodrigo Duterte , Tony Lambino
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