Non-passage of new sin taxes to make Universal Health Care law 'third-class': DOF


Posted at Jun 02 2019 11:14 PM

MANILA - The Department of Finance (DOF) renewed its call for the passage of the new excise tax rates for "sin" products, saying its non-passage will turn the Universal Health Care (UHC) law into a 
"third-class" one.

In a statement, Department of Finance (DOF) Undersecretary Karl Kendrick Chua noted that the UHC is a first-class law but failure to raise the current excise tax rates will downgrade it to a third-class law.

He also said excise taxes on sin products such as cigarettes and alcoholic drinks need to be increased to help fund the P62-billion funding deficit in the first year of implementation of the UHC program in 2020.

"These are the possible scenarios: the program will not be able to serve all Filipinos, which means some would get better health benefits, while others would not. Or, to be fair to all, everyone will be covered but the quality of service will be severely affected," Chua said.

The current Congress only has one session week left, and the sin tax reform bill is still pending at the Senate.

Senate Bill (SB) No. 2233, which was certified as urgent by President Rodrigo Duterte, provides for a P45 excise tax increase per pack on tobacco products in 2020, followed by a series of P5 hikes until the rate reaches P60 in 2023, and an annual 5 percent increase thereafter. 

Chua said House Speaker Gloria Macapagal Arroyo has committed the House of Representatives' adoption of the Senate version to ensure the bill will be passed in the current Congress without a need for bicameral negotiations.

If the measure is passed, Chua said PhilHealth coverage for primary care will expand to cover 120 drugs, with no limit on primary care treatment conditions.

Barangay health care facilities will also benefit from the measure.

For 2020, the government can cover the cost of the UHC program from its current funding sources from the national budget, the Philippine Amusement and Gaming Corp. (PAGCOR) and the Philippine Charity Sweepstakes Office (PCSO) in the amount of P195 billion. 

Without sin tax reform, however, UHC will be left with a funding shortfall of around P62 billion.