PRRD okays plan to hike excise tax on alcohol, tobacco products

President Rodrigo Roa Duterte presides over the 33rd Cabinet Meeting held at the Malacañan Palace on January 7, 2019. ALBERT ALCAIN/PRESIDENTIAL PHOTO

MANILA — President Rodrigo R. Duterte has approved the proposal of two agencies to the raise excise tax on alcohol and tobacco products to fund the government’s Universal Health Care (UHC) program.

Presidential Spokesperson Salvador Panelo said the President announced his decision during Monday’s 33rd Cabinet Meeting in Malacañang.

“The Chief Executive likewise approved the proposal of the Department of Health and the Department of Finance to increase the excise tax on alcohol and tobacco products,” Panelo said in a statement.

“This is a key public health measure to reduce deaths and disabilities due to tobacco and alcohol consumption and, at the same time, a revenue measure to fund the universal health care program,” he added.

In December last year, Finance Secretary Carlos Dominguez III pushed for the increase in the current tobacco excise tax rates to levels that would effectively curb smoking and also help supplement funds for the UHC program.

In the same month, the House of Representatives approved House Bills (HB) 8677 and 8618, which increase the tax on cigarettes and alcoholic drinks, respectively.

HB 8677 seeks to increase excise tax rates for tobacco by PHP2.

50 every year, starting July 2019 until 2022.

Under the measure, cigarette excise tax rate will be raised to PHP37.50 per pack by July 2019, PHP40 for 2020, PHP42.50 for 2021, and PHP45 for 2022. The rate would be raised 4 percent every July annually, starting 2023.

HB 8618 aims to to raise excise taxes on distilled spirits, wines, and fermented liquors.

Under the measure, the current 20 percent ad valorem tax imposed on distilled spirits shall be increased to 22 percent, while specific tax rates per proof liter of PHP30, PHP35, PHP40, PHP45 shall be imposed from 2019 to 2022. The specific tax rate shall be increased by 7 percent annually, starting 2023.

In November last year, the Bicameral Conference Committee approved the consolidated version of the UHC bill which aims to give all-inclusive health coverage for Filipinos.

Duterte endorsed UHC bill as among his priority measures during his state of the nation address (SONA) on July 23, 2018.