MANILA, Philippines - The Department of Health (DOH) is pushing for the approval of the sin tax measure filed by Senator Miriam Defensor-Santiago.
In a position paper submitted to the Senate, which has started hearings on various sin tax bills, the DOH said Senate Bill 3249 or An Act Restructuring the Excise Tax on Alcohol and Tobacco Products meets the department’s objectives of promoting health.
“The department believes that Senate Bill 3249 best supports the twin goals of deterring our countrymen especially the youth and the poor from smoking and drinking alcohol, thus protecting them from the lifetime consequences of smoking and alcohol abuse and financing a universal health care program to improve accessibility to quality health care,” said Health Secretary Enrique Ona in the paper.
Furthermore, he said that Santiago’s bill upholds the features of the original House Bill 5727 filed by Cavite Rep. Joseph Abaya.
The original Abaya bill calls for a unitary tax for all cigarette and liquor products, automatic indexation and the removal of the price classification freeze on cigarettes, Ona said.
Under the present system, the current classification is based on the net retail price survey done in 1996.
Furthermore, the Health department supports provisions in the bill, which call for a review every five years of tax rates with the aim of achieving the government’s health and revenue objectives as well as to comply with commitments to the World Health Organization.
To help tobacco farmers cope with the impact of higher excise taxes, the bill also earmarks 15 percent of excise tax revenues to programs that would help tobacco farmers.
These programs include financing of credit guarantee and crop insurance programs.
More importantly, the bill earmarks revenues for the government’s health program to be used for the expansion of the National Health Insurance Program and upgrade of health-care facilities.
The Finance department and the DOH are both pushing for the restructuring of sin taxes into a unitary tax rate from a multi-tier system for cigarettes. Incremental revenues to be raised from a unitary tax rate are estimated at P31.35 billion in the first year of implementation.