‘Sin taxes’ funding health care, social services

The government’s move to impose sin taxes on alcohol, tobacco, e-cigarettes, and sugar-sweetened beverages has enabled the country to fund the Universal Health Care program and provide social services during the pandemic, according to the National Economic and Development Authority (NEDA).

Socioeconomic Planning chief Karl Chua shared the country’s experience in pushing for excise taxes during the 75th World Health Assembly event on “The Role of Civil Society in Advancing Fiscal Policies for Public Health.”

Chua said the sin taxes have helped fund the Universal Health Care Law which seeks to give all Filipinos access to quality and affordable health care services.

Efforts on sin tax reforms have started since the previous administration.

“Through Republic Act 10351 or the Sin Tax Reform Law of 2012, we restructured the excise tax on tobacco and alcohol products,” Chua said.

Under the current administration, he said the Philippine government pursued the Comprehensive Tax Reform Program (CTRP) for a simpler, fairer, and more efficient tax system.

This included the passage of Package 1 or the Tax Reform for Acceleration and Inclusion Law of 2018, which increased taxes on tobacco products and introduced a sweetened beverage tax.

The government further increased taxes on tobacco and alcohol products and imposed a new tax on e-cigarettes through Package 2+.

The move was undertaken as previous hikes were found insufficient to curtail consumption.

Through the CTRP, Chua said the government was able to fund billions of emergency cash transfers, procure millions of life-saving vaccines, as well as pour in more investments in health and social services amid the pandemic.

“Our experience has highlighted the strong interplay between fiscal policies and social interventions. We fought hard to enact these game-changing tax reforms, and now we are seeing their benefits,” he said.

“We remain confident that the bold policies we have instituted over the past six years will further drive our economy forward and help improve the lives of the people,” he added.