House panel OKs bill hiking tobacco excise tax

The House of Representatives ways and means committee approved on Tuesday a bill seeking to increase the unitary excise tax on tobacco products.

Panel chair and Nueva Ecija 1st District Rep. Estrellita Suansing said the panel approved the proposed measure with the draft substitute bill to follow.

“It was already approved (in principle), the substitute bill will come out already,” Suansing told reporters.

Suansing explained the panel agreed to make the unitary excise tax on cigarettes P35 per pack by January 1, 2019, and P37.5 by July 2019, P40 by July 2020, P42.5 by 2021, and P45 by 2022. This will be followed by a 4 percent increase annually every July after that.

From the original excise tax of P30 in 2017, the Tax Reform for Acceleration and Inclusion (TRAIN) law increased the excise tax on tobacco to P32.50 on Jan. 1, 2018, P35 on July 1, 2018, and is scheduled to increase to P37.50 on Jan. 1, 2019, and P40 on January 1, 2020. It will increase annually by 4 percent from January 1, 2024 onwards.

Suansing also said they hope to pass the bill on final reading before their scheduled December 14 Christmas vacation.

“Before Christmas break, for sure ‘yon, kasi we have two weeks more to go,” she said.

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The still unnumbered substitute bill to be crafted would be based on Quezon 4th District Rep. Angelina Tan’s House Bill No. 6648 and Albay 2nd District Rep. Joey Salceda’s House Bill No. 4575.

HB 6648 initially seeks to increase the tobacco unitary excise tax to P60 per pack in the first year of implementation, followed by a 9 percent annual increase thereafter, while HB 4575 seeks to increase excise tax to P40 to P60 per pack in the first five years of implementation, with a 5 percent annual increase thereafter./ac