The Department of Finance (DOF) has thanked the Congress for ratifying the bill increasing excise taxes on alcohol, heated tobacco and vapor products, a reform expected to raise an additional P137.2 billion over a 5-year period to augment funding for the Universal Health Care (UHC) Program.
Finance Secretary Carlos Dominguez III said the reconciled version of the bill, which was ratified Wednesday by the Senate and the House of Representatives, will increase funds for the UHC, and at the same time is hoped to deter binge drinking and the use of harmful vaping and heated tobacco products (HTPs), especially among the youth and low-income consumers who are sensitive to price increases.
“We thank the Senate and the House of Representatives for ratifying the bill, which is an investment in the future of our people, and will help President Duterte deliver on his administration’s goal of providing a safe, comfortable, and healthy life for every law-abiding Filipino,” Dominguez said.
Dominguez also thanked Senator Pia Cayetano, who chairs the Senate ways and means committee, and Albay Representative Joey Salceda, the chairperson of the House ways and means committee, for “painstakingly studying the measure and holding extensive consultations with concerned stakeholders, and spearheading efforts that led to the swift approval of the bill in their respective chambers.”
He said Sen. Cayetano and Rep. Salceda both demonstrated their strong advocacy to push for better health care for our people by committing to align the proposals of the Senate and the House to ensure that the ratified version will get approved before the Congress adjourned for the holidays. This gives the President enough time to review the measure and sign it into law, in time for its implementation at the start of 2020.
President Duterte earlier certified the Senate version of this sin tax reform bill as an urgent measure. The House of Representatives approved its version of the measure in August.
Finance Undersecretary Karl Kendrick Chua said that under the reconciled bill approved by the bicameral conference committee, 60 percent of revenues collected from the excise taxes on alcohol products and e-cigarettes, such as heated tobacco and vapor (vaping) products, will go to the UHC, while 20 percent will be spent for medical assistance and health facilities.
The remaining 20 percent will go to programs that will help the government fulfill its commitments under the United Nations’ Sustainable Development Goals (SDGs).
He said the bill is estimated to raise an initial P22.2 billion in the first year of implementation, based on Department of Finance (DOF) estimates.
Over a five-year period from 2020 to 2024, the DOF estimates revenues totaled P137.2 billion.
The ratified bill also includes a provision that would exempt the sale and importation of all prescription medicines for high cholesterol, diabetes, and hypertension from the value-added tax (VAT).
This VAT exemption would then be extended to include medicines for mental illness, cancer, kidney diseases, and tuberculosis by 2023.
