Senate approves higher taxes on cigarettes, tobacco products
MANILA, Philippines – Voting 20-0, the Senate on Monday, June 3, passed on third and final reading the bill increasing excise taxes on cigarettes, in a bid to reduce smoking and raise funding for the universal health care program.
Senate Bill 2233 proposes a starting tax rate of P45 in 2020 or in the first year of implementation. This would be followed by a series of annual P5 increases until the rate reaches P60 in 2023. The current cigarette tax is P35 per pack.
Starting 2024, a 5% increase would be imposed annually.
- January 1, 2020 - P45/pack
- January 1, 2021 - P50
- January 1, 2022 - P55
- January 1, 2023 - P60
- January 1, 2024 onwards - 5% indexation
Here is the scheduled increase for heated tobacco and vapor products
- 0 ml-10.00 ml - P10
- 10.01 ml-20 ml - P20
- 20.01 ml-30 ml - P30
- 30.01 ml- 40 ml - P40
- 40.01 ml-50 ml - P50
- More than 50 ml - P50 plus P10 for every additional 10 ml
A revenue of P15 billion is expected next year and P140 billion until 2023.
Senate President Vicente Sotto III said the House of Representatives will adopt the Senate version to dispense with the bicameral conference committee.
In December 2018, the House approved a counterpart measure, House Bill 8677, which sets the excise tax rate at P37.50 per pack starting July 1 this year. It also proposes a tax hike on alcohol products – a provision that is absent in the Senate version.
Anti-smoking and health advocates have been pushing for much higher excise taxes, but Senate ways and means committee chairperson Juan Edgardo Angara warned that these would imperil the livelihood of more tobacco farmers who have already suffered due to earlier approved tax hikes.
President Rodrigo Duterte certified the bill as urgent, removing the three-day rule between the 2nd and 3rd readings.
The 17th Congress is set to hold its last session on Tuesday, June 4, as June 5 is a holiday. The 18th Congress will open on July 22, the same day President Duterte delivers his 4th State of the Nation Address. – Rappler.com