Excise tax hike on alcohol, tobacco could spur right spending

By Erwin Nicavera/PNA

BACOLOD CITY — A labor leader in Negros Occidental said increasing the excise tax on alcohol and tobacco products could encourage workers to spend their money wisely.

“We support this move because buying alcohol and tobacco products could reduce the workers’ income,” said Wennie Sancho, secretary general of General Alliance of Workers Associations (GAWA), on Tuesday afternoon.

This could reduce vices and promote healthy lifestyle among workers, and instead of spending their income for cigarettes and alcohol, they should have more savings for their family, he added.

Sancho also said that not spending for these “unnecessary” goods would also reduce complaints on low income among workers.

On Monday, President Rodrigo R. Duterte announced that he agreed to certify as urgent the two measures meant to raise excise tax on alcohol and tobacco products to fund the government’s Universal Health Care (UHC) program.

Presidential Spokesperson Salvador Panelo said this pertains to Senator Manny Pacquiao’s Senate Bill No. 1599, which sought to further increase the excise tax on tobacco products.

Under the measure, the current cigarette tax rate of PHP30 per pack will increase to PHP60 per pack. This is aside from the annual increase of 9 percent from the current 4 percent increase in excise tax per year.

Sancho said the measure would further encourage consumers, including minimum wage earners, to spend money wisely.

He pointed out a huge portion of the income of some workers go to vices or unnecessary spending like alcohol and tobacco products.

With higher sin taxes, the labor group is optimistic that workers will prioritize the basic needs of their families, he added.

Sancho also urged assurance from the government that the revenues from higher excise tax on these products will really be spent for its intended purpose.

Last December, Finance Secretary Carlos Dominguez III pushed for the increase in the current tobacco excise tax rates to levels that would effectively curb smoking and also help supplement funds for the UHC program.