A Call to the Outgoing 17th Congress: Enact the Law Taxing ‘Tobacco to the Max’ Now | SWP Press Release 24 May 2019
SOCIALWATCH PHILS·FRIDAY, MAY 24, 2019
A Call to the Outgoing 17th Congress: Enact the Law Taxing ‘Tobacco to the Max’ Now
Social Watch Philippines (SWP), a citizens’ watchdog, appeals to the legislators of the 17th Congress to enact a good sin tax law before it adjourns on June 5, 2019.While they recognize that the 17th Congress has already done much in the performance of its duty by legislating laws for the improvement of livelihoods, infrastructure, better and equitable access to education and health, they note that there remains unfinished work, namely, the need to finally enacting a good sin tax law to further increase the tax on cigarettes by PhP60 per pack and a 9 percent annual incremental increase thereafter.
Even before the start of the 2019 elections, various senate bills to increase taxes on tobacco have been languishing for over a year in the Senate Committee on Ways and Means, particularly, those of Sen. JV Ejercito (at PhP90 per pack), Sen. Gatchalian (at PhP70 per pack) and Sen. Pacquiao (at PhP60 per pack).
The reasons for further raising taxes on cigarettes are well-established and affirmed by experts, both local and international, including those in civil society and the general public.
According to SWP, studies show that there are over 100,000 smoking-related deaths in the country a year, which means approximately 12 Filipinos dying every hour due to tobacco-related diseases.
Largely due to the 2012 Sin Tax Law, smoking prevalence among Filipino adults went down by almost 8 percentage points from 2008 to 2015 and mainly due to the prevention of new smokers mostly among people sensitive to price levels – the poor, rural folk, youth and the elderly.
Unfortunately, it is widely noted by health authorities that in recent years, with the relative rise in incomes in certain sections of the population, and the slow increase in ‘sin’ taxes, smoking is once again on the rise thereby reversing the gains of the original excise tax increase in 2012.
Furthermore, SWP believes that the comprehensive and effective implementation of the Universal HealthCare (UHC) Law will be significantly hampered due to lack of funds, of which increasing sin tax on tobacco is intended to also address.
According to the Department of Finance, a total of PhP258 billion pesos is needed for the UHC. But the national budget, PAGCOR and PCSO combined can only raise P195 billion. This means a funding shortfall of P63 billion. If the sin tax bill is passed, whether from P60 (P30.1 billion) or P90/pack (P25.1 billion), the government will be able to cut the funding shortfall for UHC by about one half. The additional funding from the sin taxes will go to increasing the salaries for public healthcare workers, strengthening primary care services and the expansion of Philhealth insurance coverage and benefits, mostly by expanding outpatient coverage and benefits.
This is why DOH Secretary Duque has stated that the sin tax is first and foremost a health measure to fulfill the government’s goals of keeping all Filipinos healthy by providing quality and affordable healthcare. Moreover, a Pulse Asia Survey showed that 3 out of every 4 Filipinos are in favor of increasing taxes on cigarettes.
Social Watch Philippines calls on the Senate leadership as well as all legislators of the 17th Congress to finish the historic task before them by immediately enacting a good sin tax law. There are only 6 session days left before adjournment of Congress.
According to SWP, the legislators of the 17th Congress will be remembered as champions of our people’s health if they pass a good sin tax law, one that ‘taxes tobacco to the max.’ ###
Social Watch Philippines (SWP) is a network of over a hundred civil society organizations and individuals engaged in research and lobby efforts in holding the government accountable for the fulfillment of national, regional and international commitments to eradicate poverty and carry out social, economic, and gender justice. SWP promotes people-centered sustainable development by proactively monitoring the progress and delivery of social commitments forged by the government and influencing the outcomes of policy decisions through citizen's participation in public finance.
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