Civil society groups join clamor for higher ‘sin’ taxes

Date Posted : May 27, 2019

Civil society groups join clamor for higher ‘sin’ taxes

Date Posted : May 27, 2019

Various organizations, from health advocacy groups to rural poor associations, have voiced their unequivocal support for the swift approval by the Congress of measures that would impose higher “sin” taxes on tobacco and alcohol products to help curb smoking and binge drinking and raise enough revenues for the full implementation of the Universal Health Care (UHC) Program.

They called on the Senate to use the remaining weeks of the 17th Congress to fast-track the passage of these laws, that would not only raise revenues to make quality health care affordable and accessible to every Filipino family, but would also minimize the debilitating effects of “sin” products on the country’s workforce.

“We call on Congress to pass this measure that will allow us to make a significant investment in our country’s health and, ultimately, the nation’s long-term development,” said the Foundation for Economic Freedom (FEF) chaired by former Finance Secretary Roberto de Ocampo.

Leaders of 31 medical societies, including the Philippine Heart Association (PHA), Philippine College of Surgeons (PCS), Philippine Medical Association (PMA), Stroke Society of the Philippines (SSP) and the Philippine Pediatric Society (PPS) said, meanwhile, that generating crucial funding for UHC by raising excise taxes on tobacco products to at least P60 per pack “will benefit the current and future generations of all Filipinos from womb to tomb” and “save at least one million Filipinos from the deadly habit of smoking until 2022.”

The members of the Philippine Dental Association (PDA), along with hundreds of doctors, submitted statements of support for higher “sin” taxes written on their prescription pads, which were delivered to the Senate earlier last week.

The anti-poverty group Social Watch Philippines said raising excise taxes on tobacco products by at least P60 per pack will cut the funding shortfall for the UHC by half, with the additional funding to be used to increase the salaries of public health workers, strengthen primary care services, and expand the Philippine Health Insurance Corp. (PhilHealth) insurance coverage and benefits.

“The clock is ticking and there is no time to lose. Let the legislators of the 17th Congress be remembered as champions of our people’s health. Rest assured that we are with you. Sama-sama tayong mag Tax Tobacco To the Max!” (Let’s all together tax Tobacco To the Max!),” Social Watch Philippines said in its manifesto.

A coalition of various youth organizations and student councils–the Youth for Sin Tax Movement–called lawmakers to no longer hold the promise of “Health for All” through the UHC program hostage in the legislature by approving measures imposing higher taxes on “sin” products.

Other groups that have called for higher sin taxes include the Action for Economic Reforms (AER), Rural Poor Institute for Land and Human Rights (RIGHTS), and International College of Dentists (ICD)-Philippine Section Inc.

The World Health Organization (WHO) has also urged the Philippines to consider a further increase in the tobacco tax and accession to the WHO Framework Convention on Tobacco Control Protocol to Eliminate Illicit Trade in Tobacco Products, as it congratulated President Duterte “for his outstanding leadership in tobacco control despite the strong lobby of the tobacco industry in the Philippines.”

Earlier, Secretaries Carlos Dominguez III of the Department of Finance (DOF) and Francisco Duque III of the Department of Health (DOH) said the approval by the 17th Congress of higher excise taxes on tobacco and alcohol products will not only help curb bad habits, but will also generate the revenues necessary to fully fund the UHC, which will require as much as P1.44 trillion combined from 2020 to 2024.

Dominguez said that from 2020 to 2024, all current sources of government funding can cover UHC at around P200 billion annually, while the cost of the program will continue to grow to as much as P1.44 trillion during the same period.

In 2020—the first year of UHC’s implementation—the program is estimated to cost P257 TO 258 billion, which the government can partially cover with the national budget and dividends from the Philippine Amusement and Gaming Corp. (PAGCOR) and the Philippine Charity Sweepstakes Office (PCSO) in the amount of P195 billion. Without “sin” tax reform, UHC will be left with a funding shortfall of around P62 TO 63 billion, Dominguez said.

The new set of excise tax rates jointly proposed by the DOF and DOH backs the proposal of Sen. Emmanuel Pacquiao under Senate Bill (SB) No. 1599 to increase the current uniform excise tax rate on cigarettes and other tobacco products from P35.00 to P60 per pack in the first year of its implementation and an additional 9 percent per year thereafter.

Aside from tobacco products, the DOF and DOH are likewise asking the Congress to increase excise taxes on alcohol to at least P40 per liter and impose a unitary tax system on fermented liquors.

Without adjusting the current ‘sin’ taxes to at least the rates proposed by Pacquiao, Dominguez said the cumulative funding gap by 2024 will reach P426 billion.

Moreover, without a new sin tax reform law and at current premiums, members of the PhilHealth will continue to be covered for only 18 primary care drugs and seven conditions while shouldering 90 percent of the cost of prescribed medicines.

But if the current Congress gets to pass the law before it adjourns in June, PhilHealth coverage will expand to cover 120 drugs and there will be no limit on primary care treatment. The DOH has also proposed that medicine purchases will be limited to a fixed fee—the cost of the transaction alone. These are some of the specific benefits that Filipinos will receive under UHC if fully implemented.


Date Posted May 27, 2019

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