13 September 2017


Health groups prod Angara, Senate to drop plastic tax;

Urge tobacco tax to augment revenues from TRAIN


“Why use plastic tax to augment revenues from TRAIN when it has not been proven to be a steady source of revenue that will fund the promised spending of this administration, particularly for health? We know that the government needs to reform several tax systems including those in TRAIN but these should be based on merits and evidence.”


This was the statement of health groups belonging to the Sin Tax Coalition today as deliberations for package 1 of tax reforms continue in the Senate led by the Committee on Ways and Means.


The group said they had a dialogue with Senator Sonny Angara, Chair of the Committee on Ways and Means last week to ask him to include tobacco tax in the TRAIN, to complement revenues that will be raised for health and other social protection measures for the poor.


“Tobacco tax will convert TRAIN into a tax reform that is overwhelmingly pro-poor and pro-health. For example, it can provide funds to hire and train more healthcare workers so that universal healthcare can finally reach the poor, like how it financed the PhilHealth coverage of the poor and the senior citizens. Tobacco tax has also been proven to have direct health benefits, with the country seeing four million less smokers since the sin tax law was passed in 2012,” explained Dr. Antonio Dans, University of the Philippines College of Medicine professor and one of the convenors of the Sin Tax Coalition.


Jo-Ann Diosana, senior economist of fiscal policy reform group, Action for Economic Reforms said plastic tax will not be able to sustain the needed revenues, compared to the excise taxes on tobacco, fuel and automobile in TRAIN.


“Plastic tax should not be used to dilute the package of reforms under TRAIN. It will never match the revenue that reforms in the value added tax and fuel tax can bring to fund the much needed programs in infrastructure, health, education, and social protection, including the cash transfers that will benefit the poor and the near poor,” said Diosana.


Dans said their group does not question the Senators’ efforts to be more creative in thinking of other measures to raise revenues in addition to fuel tax but he said he cannot understand why tobacco tax, which is a more urgent measure, is not included in a bill whose effect on the poor is strongly debated. “Every year we wait after 2017, we will see 200,000 new smokers. The impact of the 2012 Sin Tax Law is rapidly being eroded so we need to do something now,” Dans added.


“The Senators have the obligation to raise revenues for the promised reforms of this administration. The decrease in personal income tax will result in greater spending capacity for income earners and help boost the economy’s growth. However, we know that the poor and the near poor need also more cash to help them cope with the marginal increase in prices of goods and services as a result of the passage of TRAIN. Plastic tax will not provide for that,” explained Diosana. (END)