12 December 2017


Senators urged to oppose low tobacco tax rate in bicam bill


“We appeal to our pro-health senators to reject the tobacco tax provision in the tax reform bicameral report because the very low rate of increase falls short of the health goals, specifically its inadequacy to generate revenue to finance expanded universal health care and its incapacity to dramatically reduce the number of smokers. We cannot afford our children initiated to smoking because they can buy cigarettes that are again becoming increasingly affordable.  We don’t want to point at you when we tell our children that you allowed Lucio Tan and Philip Morris to dictate the policy concerning their health.”


This was the statement of the broad sin tax coalition composed of health and economic reform advocates.


Jo-Ann Latuja-Diosana of Action for Economic Reforms (AER) appealed to the senators to question the insertion of the low tobacco tax rate.


AER learned that the insertion of the low rate of an increase of PhP 2.50 annually until 2022 came from the House of Representatives contingent and Senator Ralph Recto.


According to Diosana, this was a move to preempt the approval of bills from the Senate that provide a much higher rate increase of PhP30 to PhP60. “Aside from its marginal health impact, the insertion must be criticized for not going through the Senate deliberation. The Senate agreed to pass its version of the bill in 2018. The Senate bills have the support of civil society, specifically the bills sponsored by Senator Manny Pacquiao and Senator JV Ejercito,” she added.


Pacquiao filed Senate Bill 1599, proposing to increase the current tobacco tax rate of PhP30 pesos per pack to PhP60 pesos in 2018 and nine percent per year thereafter. Sen. JV Ejercito filed Senate Bill 1605 that will increase the tax on cigarettes to PhP 90.00 pesos in 2018 followed also by nine percent increase per year after the first year.


“The rate increase approved by the bicameral committee will hardly make a dent in reducing the number of smokers. The revenue it can generate is far off from what we need to expand and strengthen universal health care. The members of the bicameral committee who approved this insertion in the bill will suffer the consequences of their action in the next election. They will be marked,” said Diosana.


The civil society advocates assert that the insertion of tobacco is legally questionable because the Senate has not passed a tobacco tax bill. The role of the bicameral committee is to reconcile the versions of the Tax Reform for Acceleration and Inclusion (TRAIN) bill passed by the House of Representatives and the Senate. Neither the House version nor the Senate version of the TRAIN bill contains a provision on the tobacco tax.


Diosana said this violates the rules and can be questioned in the Supreme Court. “Further, the House insertion of the low increase in the tobacco tax is an insult to the Senate. Worse, it is a mockery of legislation,” Diosana added. (END)