DOF: No backup funds for UHC if Congress fails to pass cigarette tax hike

MANILA, Philippines—The Department of Finance (DOF) admitted Wednesday that it has “no backup” source of funds for the implementation of the Universal Healthcare (UHC) law should Congress fail to pass the proposed higher excise tax on tobacco products on time.

The Senate and the House of Representatives have roughly three session days left before the end of the 17th Congress.

“Wala po tayong Plan B. Sinabi po ng pangulo na this is priority legislation, let certify this as urgent so we’re positive and confident na it will be passed,” DOF Undersecretary Karl Chua told reporters during the Kapihan sa Manila Bay forum in Malate, Manila.

“If there are additional funds that we need we will push the other tax reform para lang maging mas malusog ang bawat Pilipino,” he added.

Duterte recently certified as urgent Senate bill 2233 which imposes a staggering increase in the cigarette excise tax from 2020 to 2023.

READ:  Duterte certifies as urgent bill on higher tobacco excise tax

The bill proposes a starting rate of P45, or P10 in the first year of implementation, which will be followed by an annual P5 increase until the rate reaches P60. After this, the tax would automatically increase by 5 percent annually.

The additional revenue from the tobacco tax hike is being eyed to address funding for the UHC Program, provided under the law that Duterte signed in last February.

According to DOF data, P62 billion will be the funding gap for the implementation of the UHC in 2020; P73 billion will be needed for 2021; P85 billion for 2022; P96 billion for 2023; and P110 billion for 2024.  (Editor: Mike U. Frialde)