MANILA, Philippines – Senator Juan Edgardo Angara on Monday, May 27, sponsored the bill seeking to increase excise taxes on tobacco products, in a bid to reduce smoking and raise funding for the universal health care program.

Angara, chairperson of the Senate ways and means committee, said the panel did a “balancing act” in crafting the bill that would raise excise taxes for every cigarette pack from P45 to P60 in the next 4 years.

“We’re legislating not so much a single sweet spot, but a ladder where we hope all stakeholders involved can make a smooth transition,” said Angara in a statement.

“In essence, we’re providing up to 4 years of graduated increases so that more of our tobacco farmers can shift crops; the tobacco companies can recast their financial projections; and the DOH (Department of Health) can catch up with its underspending,” he added.

The committee report proposes a starting 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.

After that, an automatic 5% increase would be imposed annually.

In December 2018, the House of Representatives 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 committee report.

The 17th Congress has only 5 session days left before it adjourns. It remains to be seen if the Senate could approve the bill on 3rd and final reading on time. After that, a bicameral conference committee has to be convened to settle differences between the Senate and House versions.

Anti-smoking and health advocates have been pushing for much higher excise taxes, but Angara warned that these would imperil the livelihood of more tobacco farmers who have already suffered due to earlier approved tax hikes. – Rappler.com