Duterte OKs proposal to increase excise tax on alcohol, cigarettes

MANILA, Philippines — President Rodrigo Duterte approved the Department of Health (DOH) and the Department of Finance’s  (DOF) proposal to increase the excise tax on alcohol and tobacco products, Malacañang said Tuesday.

Duterte approved the proposal during Monday’s Cabinet meeting, Presidential Spokesperson Salvador 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,” Panelo said.

The House version of the sin tax reform bill, which the lower chamber passed on the third and final reading before the lawmakers went on Christmas break, imposed an additional tax of P2.50 on every pack of cigarettes.

In the Senate, bills introduced separately by Senators Manny Pacquiao and JV Ejercito, proposed an excise on a pack of cigarettes higher than the levy in the version passed by the House.

Pacquiao’s Senate Bill No. 1599 wants to increase the tax to P60 per pack while Ejercito’s Senate Bill No. 1605 seeks to raise it to P90—both substantially higher than the current excise rate of P32.50 per pack.

During the Cabinet meeting, Panelo said Duterte was briefed about the implications of the reenacted budget for the first quarter of 2019, which include a delay on the implementation of the salary hike for employees of the government, teachers, policemen and soldiers.

“Delays on the infrastructure programs and delivery of basic social services will also be observed. The upcoming plebiscite on the Bangsamoro law, however, will not be affected as the budget for this was already included in the 2018 budget,” he said.

The creation of a disaster department was also tackled during the meeting to address the emerging challenges to disaster resiliency. The Cabinet was briefed on the damages of Tropical Depression Usman, as well as on the assistance provided by concerned agencies.

“The Cabinet also discussed that the special road funds can be used to finance hospital needs and the clean-up of the Manila Bay. A portion of the fund can also be used to benefit those affected by TD Usman specially those in the Bicol Region,” Panelo said.

“The meeting ended with the good news noting that the average inflation rate under the Duterte Administration is at 3.6% which falls within the government’s target range of 2-4 percent,” he added. /je