Health groups back higher sin taxes

ABS-CBN News

Posted at Aug 09 2010 02:37 PM | Updated as of Aug 09 2010 10:37 PM

MANILA, Philippines - Health groups are backing a planned proposal by new Health Secretary Enrique Ona to increase the tax on cigarettes to shore up government revenues.

The Framework Convention on Tobacco Control Alliance Philippines (FCAP) had a dialogue with Ona recently where the health department chief said he was agreeable to following the lead of the US government to increase tax on tobacco products to $0.10 per pack.

“We are banking on Secretary Ona’s proposal to increase cigarette tax by $0.10 per stick or an equivalent of P4.50 per stick or P90 for every 20-stick cigarette pack. The health secretary’s proposal will go a long way for the Aquino Administration facing a huge budget deficit while dealing with very high expectations on poverty alleviation and addressing the social welfare of the people,” said Dr. Maricar Limpin, executive director of FCAP.

Under Republic Act 9334, existing local taxes on cigarettes range from P2.47 for low-price brands to P27.16 per pack for premium brands, placing the Philippines among the countries selling the cheapest cigarettes in Asia.

FCAP has been lobbying for the passage of laws that will reform the existing tax structure so government could earn higher revenues from tobacco products. The group said higher taxes could also reduce smoking prevalence among the youth and the poor.

“With the government’s meager resources, the least that this government needs is more poor people getting sick of smoking-related diseases such as cancer, pulmonary and cardiovascular diseases,” explained Limpin.

Based on the 2006 Bureau of Internal Revenue annual report, excise tax collection from tobacco amounted to P26.8 billion, accounting for only 4.1% of the total BIR collection during that year.

On the other hand, FCAP said healthcare expenditures on four major diseases -- lung cancer, heart attacks, stroke, chronic obstructive lung diseases -- amounted to P276 billion, according to the 2005-2006 Tobacco and Poverty Study in the Philippines conducted by the UP College of Public Health, National Epidemiology Center of the Department of Health, and World Health Organization.