DoF wants higher sin tax revenues

A DAY after the House of Representatives passed a bill that aims to impose higher taxes on alcohol and tobacco products, the Department of Finance (DoF) said it hopes to renegotiate the measure with the Senate to generate higher revenue to fund the Universal Health Care (UHC) program.

In a congressional briefing, Finance Undersecretary Karl Chua said the approval of House Bill (HB) 1026 would only generate P17 billion for the first year, about half of the P33 billion gain projected by the DoF.

“We proposed a higher one because our main concern is to have sufficient funds for universal health. This is just the beginning because we can still negotiate for a higher rate with the Senate,” Chua said in English and Filipino.

“UHC’s funding cap in the first year was pegged at P62 billion. So, with P15 billion from the tobacco, P17 billion possibly from alcohol, our cap gets smaller, so this is a very good start already. But, of course, we will try better in the coming Senate deliberations,” he told reporters.

Chua said if the sin tax rates would not be raised, UHC beneficiaries might not be able to enjoy the full health services under the program.

“There might be a delay or everyone might not be able to receive 100 percent, the UHC might only deliver 90 percent. So, those are the options. When we get to the Senate, we will present the options and what will happen if we do not raise it further,” he said.

The health services under the UHC includes 120 free primary care craft, unlimited primary treatments for tuberculosis, diabetes, pneumonia, gastrointestinal

problems and a fixed fee for membership of the program alone.

Rep. Joey Salceda, who heads the Ways and Means Panel, expressed hope that no additional provisions will be made when HB 1026 reaches the Senate.

“Away‘yan ( There will be conflict). All the time that the House approves a lower [rate], the Senate approves higher and we would end up with something in the middle which is usually higher than the House,” he said.

Salceda’s panel approved on Tuesday the measure invoking Rule 10, Section 48 of the House Rules, paving way for its plenary approval through voice vote.

“I think the week after next, we will try to have an approval. We’re working on committee amendments already,” the lawmaker said.

The initial proposal, which was approved in the last Congress, only included excise taxes on alcohol products with an ad valorem rate of 22 percent, including specific tax rates per proof liter of P30 from 2020, to be followed by an additional P5 specific tax until it reaches P45 per liter in 2022. From January 2023 and in the succeeding years, the specific tax rate will be at 7 percent.

The inclusion of heated tobacco and vapor products in the amended measure comes with an estimated P3.2 billion in projected revenues, as these will be levied P45 per pack with a P5-yearly increase until it reaches P60 in 2023, with a fivepercent yearly increase starting 2024.

Vapor products sold more than 50 milliliters (ml) will have P50 excise tax with an additional P10 per additional 10 ml.

GLEE JALEA