MANILA - President Rodrigo Duterte has approved the health and finance departments’ proposal to raise the excise tax on tobacco and alcohol products, the Palace said Tuesday.
Presidential Spokesperson Salvador Panelo said the President approved the proposal during the 33rd Cabinet meeting on Monday, January 7.
“This is a key public health measure to reduce deaths and disabilities due to tobacco and alcohol consumption and, at the same time, a revenue measure to fund the universal health care program,” Panelo said in a statement.
The Department of Finance earlier said it will back a bill by Senator Manny Pacquiao raising the tobacco excise tax rates to P60.
Under the Tax Reform for Acceleration and Inclusion Law, the tobacco excise tax, currently at P35, will be raised to P40 by Jan. 1, 2022. This will then increase by 4% annually starting Jan. 1, 2024.
The DOF, under its proposed Package 2 Plus of the Comprehensive Tax Reform Program, is also seeking to raise excise tax rates for alcohol.
Meanwhile, the President was also briefed on implications of a reenacted budget for the first quarter of 2019, including a delay on the implementation of the salary hike for employees of the government, teachers, policemen and soldiers.
“Delays on the infrastructure programs and delivery of basic social services will also be observed,” Panelo said.
But the presidential spokesman said the upcoming plebiscite on the Bangsamoro Organic Law will not be affected as the funds for this was already included in the 2018 budget.
Duterte has extended the validity of the 2018 budget after Congress failed to pass the 2019 General Appropriations Act before it adjourned for the holidays last year.
A timetable earlier released by Senate Majority Leader Juan Miguel Zubiri showed that the 2019 budget may not be signed by congressional leaders until February 7.
The Palace has asked Congress to pass the 2019 budget immediately.
Also discussed during the Cabinet meeting was the possible usage of road funds to finance the public’s hospital needs and clean-up of Manila Bay.
A portion of the fund can also be used to benefit those affected by tropical storm Usman especially those in the Bicol Region, Panelo said.