Philippines: Tobacco sin tax to generate PHP15.7bn in additional revenues

  • The newly enacted tobacco sin tax law is expected to generate PHP15.7bn in additional revenue in 2020, narrowing down the projected financing gap for the government’s Universal Health Care (UHC) program, the Department of Finance (DOF) said over the weekend ending on 28 Jul 19.
  • “(The expected revenue is) PHP15.7bn in 2020 and PHP129.9bn over 2020-2025 of implementation,” Lambino said.
  • According to the DOF, proceeds from the incremental excise taxes would be used to help fund the government’s UHC program, which would require PHP257bn in 2020, or PHP1.44tr over 2020-2025.
  • However, the amount is still lower than the funding gap for UHC, which was pegged at PHP62bn for 2020 alone, and PHP426bn until 2024.
  • This means the UHC still has a funding gap of PHP46.3bn for 2020 or PHP296.1bn over 2020-2025.
  • To further bridge this gap, Lambino said the DOF is pushing for the passage of additional excise taxes on alcohol and electronic cigarette products.
  • “Several legislators have already filed versions of the alcohol and e-cigarette tax reform bill. We are hoping to further close the financing gap via this measure,” he said.
  • Going forward, the DOF also wants to increase excise taxes on alcohol products to at least PHP40 per liter, and to raise sin taxes on e-cigarettes to PHP45, or the same level as that of regular cigarettes.

External Link : https://www.philstar.com/business/2019/07/29/1938681/tobacco-sin-tax-generate-p157-billion-additional-revenues

29-Jul-2019


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