P90 tax per cigarette pack? DOH chief on his own

MANILA, Philippines - Malacañang disowned yesterday a proposal of Health Secretary Enrique Ona to impose a P90 tax per 20-stick pack of cigarettes to raise more revenues for the government.

Speaking to reporters, presidential spokesman Edwin Lacierda said it could be Ona’s personal opinion.

“At this point, there is no policy discussion on that proposal,” he said.

Lacierda said the figure mentioned didn’t come from the Department of Health but from the Anti-Tobacco Coalition.

Lacierda said any proposal to increase taxes on cigarettes would be discussed in a Cabinet meeting.

“There are no policy considerations on that yet,” he said.

“We still have to coordinate with the finance department. It will be too speculative for me to answer that question now.”

Dr. Yolanda Oliveros, Ona’s head executive assistant, said her boss backs the proposed tax to fortify efforts to discourage Filipinos from smoking.

Ona would like to adopt the tax scheme for cigarettes proposed by US President Barack Obama, she added.

“Increasing the tax will reduce access to tobacco because we will reduce the capacity (of smokers) to pay,” she said.

“In doing this, our primary targets are the students. If cigarettes become more expensive, they won’t be able to afford it anymore.”

Obama had eyed a tax of $0.10 per stick or $2 per pack or P90 (P1:$45) for every 20-stick pack.

Ona believes that the government would not only generate revenues from cigarette taxes but also reduce the incidence of cancer, cardiovascular and pulmonary diseases and other illnesses related to smoking.

The taxes to be generated from cigarettes are also expected to help fund the enrollment of some five million poor Filipinos in the Philippine Health Insurance Corp.

Ona had made known his stand on cigarette taxes in a dialogue with non-government organization Framework Convention on Tobacco Control Alliance Philippines last Aug. 3.

Dr. Maricar Limpin, FCAP executive director, had lauded Ona for this pronouncement.

“We are banking on Secretary Ona’s proposal to increase cigarette (tax),” she said.

“The health secretary’s proposal will go a long way for the Aquino administration (which is) facing a huge budget deficit while dealing with very high expectations on poverty alleviation and addressing the social welfare of the people,” she said.

Limpin said the current taxes on cigarettes range only from P2.47 for “low-priced brands” to P27.16 per pack for “premium cigarette brands, placing the Philippines as among the countries selling the cheapest cigarettes in Asia.”

“The executive branch has expressed its need for resources and the role of the legislature is to deliver these to the people. Tobacco tax increases will result in higher prices of cigarettes and will help reduce smoking prevalence especially among the youth and the poor,” she said.

Sen. Ralph Recto sees the inevitable rise in the taxes on alcohol and tobacco products.

The chairman of the Senate committee on ways and means said proposals to increase sin taxes would have to be discussed soon because Republic Act 9334, the law that raised taxes on alcohol and tobacco products, would end next year.

“So as early as 2010, we will have to hear it immediately to prepare for the expiration in 2011 and increase the rates and hopefully subject it to inflation so that as prices go up you are able to collect the proper taxes as well,” he said. He was principal author of the law in the Senate.

Recto said the DOH’s proposal would have to be studied carefully because it would increase government revenues and discourage people from smoking.

“I’m sure it will go up,” he said. “To what extent I don’t know yet because we have to hear it. Chances are there will be an increase. – With Marvin Sy