Health group backs DOF proposal to increase sin tax

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HealthJustice Philippines, a public health policy think tank and advocacy group with expertise in tobacco control and health promotion, gave its thumbs up to the Department of Finance’s proposal to raise tax on sin products, especially tobacco, as part of its proposed tax policy reform program.

In the Ways and Means Committee hearing at the House of Representatives last September 20, Finance Undersecretary Karl Kendrick T. Chua announced that among the priority bills of the DoF seeks to increase sin taxes, which, according to him, should be increased in order to be an effective health measure.

“We support the DoF proposal to further increase tobacco tax since we still have a low tax burden on tobacco. Increasing tobacco tax will maximize the benefits that have resulted from it, such as less prevalence in smoking among the youth and the poor and a long term benefit on the public’s health through lower incidence of tobacco-related diseases,” said Atty. Irene Reyes, Managing Director of HealthJustice.

Chua pointed out that an increase in sin taxes would bring in additional revenue amounting to 22 billion in 2018 and 46 billion in 2019. The Sin Tax Reform Law (RA 10351), which then President Benigno Aquino III signed at the tail-end of 2012, reformed the Sin Tax system so that by 2018, taxes would increase by four per cent every year, a rate which Chua described as “too low, given the excise burden.”

“Sin tax is a very effective health measure. But tobacco prices in the Philippines are still low compared with those in other countries. For instance, cigarettes in Singapore are 10 times more expensive,” Chua said.

A HealthJustice study found that cigarette prices had been declining in the past years prior to the implementation of the Sin Tax Law in 2013. However, by 2017, the price of cigarettes will start to erode by 1-1.2% annually considering the increase in average daily salary, GDP per capita, and taking into account inflation. The study concluded that 4% indexation set in the Sin Tax Law will not be sufficient to halt this price erosion.

HealthJustice received the prestigious Bloomberg Award for Global Tobacco Control. It is a partner of the Southeast Asia Tobacco Control Alliance (SEATCA) and the Campaign for Tobacco-Free Kids (CTFK), and has been doing research and policy advocacy on tobacco control and health promotion.

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