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DOF warns of delay, health services cuts with House version of alcohol, tobacco tax

/ 01:28 PM August 15, 2019

MANILA, Philippines — There could be delays or cuts in the services promised by the Universal Health Care (UHC) law if Congress bars higher “sin tax” rates on alcohol and vape products, Finance Undersecretary Karl Kendrick Chua warned Thursday.

On Wednesday, the House approved on second reading House Bill No. 1026 which seeks to impose higher tax rates on alcohol, heated tobacco, and vapor products. But the House version proposes lower excise tax rates compared with the proposal of the Department of Finance and Department of Health.

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READ: House approves on 2nd reading new sin taxes

In a press conference with Albay 2nd District Rep. Joey Salceda, chair of the House ways and means committee, Chua said this may cut down health services promised under the UHC.

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“The consequence of not raising it is that may mga hindi makakatanggap ng benepisyo immediately kasi may delay, or lahat po ay hindi makakatanggap ng 100 percent baka 90 percent lang ng mga pinangako ng UHC,” Chua said.

Under the House version, the projected revenues would reach P15.6 billion by 2020, just half of the P33.3 billion that the DOF wants. The House version is also projected to gain a revenue of P110.3 billion from 2020 to 2024, while the DOF-DOH version is seen to reach P249 billion in revenues from 2020 to 2024.

The DOF official nonetheless expressed hope that the Senate would accept their version of the bill.

READ: DOF to still push alcohol taxes higher than rates OKd by House panel

“So pagpunta namin sa Senate, we will present the options and what will happen if we do not raise it further… We will present the case and hopefully, the Senate will have more openness to the higher rate,” Chua added.

Salceda meanwhile stood firm on the tax rates proposed by the lower chamber.

“Away ‘yan, kasi hindi naman pwede basta basta (baguhin), although I’m sympathetic… Syempre ‘yung position namin ito, I’m bound by it but certainly when I come back to the House. If the bicam comes up with a higher rate then I have to justify it to the members and the leadership,” Salceda explained.

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The sin tax is part of the Package 2+ of the Duterte administration’s comprehensive tax reform program. The tobacco tax portion of the package was enacted into law last June, but the alcohol part was not enacted into law during the 17th Congress.  /muf

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TAGS: Alcohol, E-cigarette, Excise Tax, House, vape tax
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