‘Sin’ tax hike in itself can’t undo corruption, inefficiencies in system: Recto

Ina Reformina, ABS-CBN News

Posted at May 29 2019 09:11 PM

MANILA—Raising excise taxes on tobacco to P60 per pack could exacerbate corruption, and inefficiencies in tax collection and health-care service delivery if existing problems are neglected, a lawmaker said Wednesday.

Issues, such as health-insurance fraud and corruption, need to be addressed in order to fully realize the intent of the Senate Bill No. 2233, which is to fill the funding gap for the Universal Health Care program, Sen. Ralph Recto said during a plenary speech.

The Department of Health must adjust the expenditure program to make sure funds are not wasted, Recto said. 

“If we’re saying that there is already health insurance fraud, there’s inefficiency, and even possible corruption then without fixing the problems we are in effect increasing the chances of inefficiency, corruption [by raising 'sin' tax],” Recto said in his speech.

“The solution is not always to throw money at the problem especially if the agency not only does have a weak absorptive capacity but is mired also with insurance fraud, inefficiency, and corruption.”

Senate President Vicente Sotto III and Senate Blue Ribbon Committee chair Richard Gordon have expressed concern that smuggling cigarettes and other tobacco products could worsen if the proposal to raise excise taxes gains the Senate's approval. 

Senate Minority Leader Franklin Drilon, author of the Sin Tax law of 2012, on Monday said he would introduce amendments to the pending tobacco excise tax hike to ensure funding for health-related programs.

The Senate is set to resume deliberations on the measure Monday.