Tax cigarettes & booze to fund better health care

MANILA, Philippines – Officials from the Department of Health (DOH) and the World Health Organization (WHO) are eyeing taxes on tobacco and alcohol as non-traditional avenues for financing healthcare. 

The officials spoke about challenges and solutions facing Philippine healthcare at the 2nd Journalism for Nation Building Foundation Health Reporting Series put on by the Pharmaceutical and Healthcare Association of the Philippines (PHAP) in Quezon City’s Eastwood Richmond Hotel.

“Tobacco tax alone, from our calculations with our NGO partners and University of the Philippines law school, will raise more than a hundred billion pesos a year,” said WHO representative Dr. Soe Nyunt-U.

President Aquino has been averse to imposing additional taxes but the government needs fresh cash to fund social support programs. As the CEO and President of PhilHealth Dr. Eduardo Banzon said, “Universal health care will not happen without more money. To expect universal healthcare to happen with the current amount of spending is naive.”

The way the doctor sees it “tobacco is something that doesn’t give you any benefit”. He cites tobacco as one of most common causes of non-communicable diseases, like cancer. “From tobacco and alcohol you might get sufficient resources for the next couple of years to improve the health sector,” said Nyunt-U. 

But it is unlikely that tobacco and liquor companies whose products would increase in price will favor new sin taxes, the excise tax rates on cigarettes and distilled spirits.

The former sin tax system passed in 2004 by then president Gloria Macapagal-Arroyo favored brands introduced before 1996, like Lucio Tan’s Fortune Tobacco Corp. which merged with Philip Morris and currently controls 90% of the Philippine tobacco market.

Health Undersecretary Teodoro J. Herbosa said, “What the tobacco companies have to understand is that we’re not telling them to stop. Basically what will happen is people will pay more if they want to use tobacco and that helps the healthcare system.”

Herbosa said the taxes could be used to help take care of mothers instead of those suffering from overuse of alcohol and tobacco.

Although the president is himself a smoker, Nyunt-U believes the president and congressmen can differentiate between their individual habits and their responsibilities as lawmakers.

When it comes down to it Nyunt-U sees the situation quite simply, “The government is promising many things to improve the social sector and the government needs money.”