Law signed hiking tobacco excise tax

MANILA, Philippines — President Duterte yesterday signed into law a bill raising the excise tax on tobacco products to support the government’s universal health care program.
Republic Act No. 11346 will hike tobacco excise tax rates and impose taxes on heated tobacco and vapor products.

The measure, which was transmitted to Malacañang last June 27, would have lapsed into law on July 27 had Duterte not acted on it. 

“To address the urgent need to protect the right to health of the Filipino people and to maintain a broader fiscal space to support the implementation of the Universal Health Care act, the President has signed into law House Bill no. 8677/Senate Bill no. 2233 increasing the excise tax on tobacco products,” Executive Secretary Salvador Medialdea said in a text message yesterday. 

The law will increase the excise tax slapped on cigarettes from P35 to P45 per pack next year. The tax will be raised to P50 per pack in 2021, P55 per pack in 2022 and P60 per pack in 2023.

From being excise-free, heated tobacco products or e-cigarettes will be levied tax of P10 per pack beginning next year. The tax will increase by five percent every year effective Jan. 1, 2021.
Vapor products, individual cartridge, refill, pod or container of its liquid solutions or gel will be charged P10 per 10 ml. Products that are more than 50 ml will be slapped with P50 excise tax plus P10 per additional 10 ml.

The taxing of e-cigarettes is seen to raise an additional P2 billion in state revenues.

The finance department has said the tobacco excise tax law would generate P15 billion in revenues during the first year of its implementation.

The government has been raising taxes on tobacco products to discourage the public from consuming them and to generate additional revenues. 

Two years ago, Dutetre signed into law the first package of the tax reform program which raised tobacco excise tax rate from P31.20 per pack in 2018 to P32.50 per pack between January to June 2018, P35 per pack from July 2018 to December 2019, P37.50 per pack in 2020 and 2021 and P40 per pack in 2022 and 2023 and a four percent annual indexation onwards.
In 2012, former president Benigno Aquino III signed a law restructuring the excise tax on alcohol and tobacco.