4,698 guests

Go slow on cigaret tax hike — Angara

  • Written by Camille P. Balagtas
  • Published in Nation
  • Read: 460

SENATOR Juan Edgardo “Sonny” Angara said the Senate will listen to the proposals of the health sector and non-government organizations to increase the cigarette tax rates including the proposal of neophyte Sen. Manny Pacquiao but insisted on the need to weigh things carefully and the government making a thorough review.

“Their proposal is based on preliminary data and analysis with respect to the effects of the proposal, particularly on revenues. It has been claimed that increasing the tax rate to P60 per pack will raise P68 billion in revenues. This has to be looked at and studied carefully,” Angara said.

Senator Pacquiao insisted on the need to impose a higher tax on tobacco citing the fact that this product is causing more harm than good to the health of the people.

“This is not only to collect more revenues but, above all, to protect the people’s health,” Pacquiao said in his Senate Bill 1599.

Once the bill is approved, the current cigarette tax rate of P30 per pack will increase to P60 per pack. This is aside from the annual increase of 9% from the current 4% increase in excise tax per year.

Pacquiao maintained that the implementation of the Sin Tax Reform Act (RA 10351) has been proven effective in minimizing if not totally stopping the smoking habit and in raising funds for public health.

RA 10351 was passed in 2012 primarily to curb cigarette and alcohol addiction as well as to raise government funds for the implementation of Universal Health Care (UHC).
The senator from Mindanao had asked Senator Angara, chairman of the Senate Committee on Ways and Means, to include Senate Bill 1599 in the Tax Reform for Acceleration and Inclusion (TRAIN).
“Cigarette smoking has been linked to several chronic health problems like obstructive pulmonary disease, lung cancer, hypertension and heart ailment, among others,” Pacquiao explained in his proposal.
Since the enactment of the Sin Tax Law of 2012 or Republic Act 10351, collection of excise tax on cigarettes went up every year. From P32.9 billion cigarette tax collection in 2012, it more than doubled to P70.4 billion in 2013. In 2014, it reached P75.5 billion and in 2015, P100 billion.
However, in 2016, collections from cigarettes dropped to P94.5 billion—the first time collections went down despite higher excise tax rates.
But Angara also said that the government has yet to provide a sound explanation why there has been a decline in the revenue collection from cigarettes in 2016. The reason cited was possible tax evasion problems through the proliferation of fake stamps and smuggled imported products.  

“The sin tax collections fund our PhilHealth premiums that enabled the government in recent years to cover more beneficiaries. We don’t want to see a decline in the funding that will reduce the benefits for PhilHealth beneficiaries. While the Senate committee is open to reviewing and amending the sin tax law, it shall consider proposals as soon as the appropriate government agencies have submitted additional and substantial studies and analysis,” Angara said.
Angara said the Department of Finance is still studying the ideal price point to take into account the public health impact and the price “elasticities” of cigarettes.
“It is important to note that the sin tax law already provides for an automatic indexation of tax rates, meaning they go up every year as it is. The DoF has also expressed confidence that the government can collect additional P24 billion per year from the acquisition of Japan Tobacco International Inc. (JTI) of Mighty Corp.” Angara said.