DoF: Higher tobacco tax to prompt smokers to quit
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Mon, 25 Feb 2019 16:19:45 +0000
Higher tobacco taxes can reduce the number of smokers in the country, the Finance department said on Monday as it again urged Congress to consider raising planned tax hikes.
Increasing excise taxes on tobacco products to P60 per pack will bring down cigarette consumption by 16.8 percent and prompt 3.2 million adults to quit smoking, the department said in statement, citing simulations developed with the Department of Health and the World Health Organization.
It quoted Health Secretary Francisco Duque 3rd as saying that the proposed tax rate would “avert approximately 713,000 deaths and will result to 3.2 million quitters in adults.”
“This rate will also bring down smoking prevalence to 16.8 percent and help reach our non-communicable disease target,” he added.
Finance Undersecretary Karl Kendrick Chua was also quoted as saying that a P60 per pack rate would prompt “the youth, the poor and other price-sensitive cigarette users to stop smoking.”
A P35 rate was levied this year on cigarettes packed by hand and by machine, rising to P37.50 in 2021 and P40 in 2023. The rate will be increased by 4 percent annually thereafter.
Both the Finance and Health departments want the rate to be raised to P60 and by 9 percent annually thereafter but this has been rejected by the House of Representatives.
Legislators instead approved House Bill (HB) 8677, which seeks to raise the current tax of P35 per pack to P37.50 beginning July 2019. This will be increased to P40 in July 2020, P42.50 in July 2021 and P45 in July 2022. Thereafter, the rate will raised by 5 percent annually.
Chua claimed that projected revenues from HB 8677 would not be enough to fund a Universal Health Care (UHC) funding gap of around P40 billion.
“The total difference [between the House-approved version and the DoF-DoH proposal] is P244 billion if computations are done up to 2022, which might undermine the effective implementation of the UHC,” he said.
Duque and Chua pointed out that with cigarette prices in the Philippines still the seventh lowest in the Association of Southeast Asian Nations and with disposable incomes rising, tobacco products remained affordable even for the poor.
The Finance and Health departments, backed by several health advocacy groups, are also urging the Senate to approve a Senate bill calling for the P60 per pack rate, which is estimated to raise incremental revenues of P30.1 billion to fund the UHC program.
“We urge the Senate to support the measures that will achieve the objectives of UHC and ultimately a healthier population,” Chua said.
Duque, meanwhile, said both departments had “worked towards developing a proposal that would achieve the twin objectives of protecting the public’s health and at the same time raising sufficient revenues for the implementation of the Universal Health Care [program].”
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