Pia seeks accounting of DOH’s P300-M share of ‘sin taxes’

Sen. Pia Cayetano called on the Department of Finance and concerned agencies to provide an accounting of the P300-million share of the health department from the collection of sin taxes imposed on cigarette and alcoholic drinks since Republic Act 9334 was passed two years ago.

Cayetano wants to know if provisions of the said law are followed to the letter.

This after she learned that the supposed beneficiaries – Department of Health and the Philhealth – were unable to collect their part of the revenues generated from sin taxes.

“I think it’s a bigger sin on the part of the Department of Finance not to remit these collections to health services because it’s specified clearly in the law,” Cayetano said.

Section 24 of Republic Act 9334 (“An Act Increasing the Excise Tax Rates imposed on Alcohol and Tobacco Products) mandates that the Department of Health (DOH) and Philhealth (Philippine Health Insurance Corp.), should each receive 2.5 percent of the annual incremental revenues from the Sin Tax Law.

“But the DOH has been complaining to me that not a single centavo has been remitted to them ever since the law was passed. So where does the money go?” Cayetano asked.

She noted that in 2005 alone, P52 million each should have gone to the DOH and Philhealth, or a total of P104 million for public health services. The figures are based on the P2.094-billion incremental revenues from the new sin taxes in 2005, the first year of implementation of RA 9334.

“If we factor in incremental revenues in 2006 and 2007, then we could be talking of at least P300 million that should have been spent on public health programs and to expand universal coverage of Philhealth – especially for the unemployed and informal sector workers,” she added.

Cayetano added that the purpose of the earmarking provision is to give additional funding for the DOH to pursue its health promotions program, because the latter amounted to only P42 million in 2007, which is only .03 percent of total health expenditures in that year.

“Taxpayers have reason to be outraged. It doesn’t matter whether you smoke and drink or not. The tax collected from you by the government should serve its mandated social purpose,” she said.

She added that the unremitted funds for health could be much bigger if the social earmarking provision of the Expanded Value Added Tax (EVAT) Law or RA 9337 is also factored in.