Pacquiao wants cigarette tax doubled to P60 per pack next year

Senator Manny Pacquiao has filed a bill to double the excise tax on cigarettes from the existing P30 per pack to P60 per pack by 2018.

In Senate Bill No. 1599 filed on October 3, Pacquiao said increasing cigarette excise tax further will “maximize its potentials in improving health, revenue, and other development goals.”

Aside from increasing the tax to P60 per pack, Pacquiao is proposing that the tax rate be adjusted annually by 9 percent.

The Sin Tax Reform Law of 2012 mandated a unitary tax rate of P30 to be imposed on all cigarette packs this year.

Pacquiao said that while the law has reduced consumption by 26 percent between 2012 to 2015, “the prevalence rate in the Philippines is still high, compared to countries in the region.”

“Thus, this bill seeks to legislate a tobacco tax reform policy that will increase the unitary cigarette excise tax to P60 by 2018 and stipulate a 9% annual increase in the excise tax, thereafter,” Pacquiao said in his bill’s explanatory note.

He said his bill will reduce smoking prevalence to 19.8 percent by 2020, as well as generate incremental revenue to contribute to the government’s higher tax effort target.

Pacquiao said the revenues from the targeted increase in excise tax will help sustain funding for primary care system and the Universal Health Care.

In an interview, Pacquiao said he has asked Senator Sonny Angara, chairman of the Senate ways and means committee, to include his proposal in the priority measure Tax Reform for Acceleration and Inclusion (TRAIN) or the tax reform program.

“Nag-manifest ako na i-include siya, isali sa Package 1 sa TRAIN, sa tax reform…Pag-uusapan pa lang,” Pacquiao said.

“Biro mo, pag mataas natin yan, baka maka-dagdag ng P60 [billion] to P70 billon a year,” Pacquiao said.

In a statement, Angara said Pacquiao’s suggestion to include the increase in tobacco tax in the TRAIN “has to be looked at and studied carefully.”

In a separate text message, Angara said Pacquiao's proposal came “somewhat late” as his committee had already conducted 19 hearings on the TRAIN.

“It could have been filed earlier so we could have had hearings where all sides and stakeholders could have been heard on these proposals. We will defer to what the majority decides,” Angara said.

Still, Angara said the ways and means committee is also “open to reviewing and amending the sin tax law” as soon as the appropriate government agencies submits additional studies and analysis on the revenue collection from cigarettes.

According to Angara, since the enactment of the sin tax law collection from excise tax on cigarettes went up every year. From P32.9 billion cigarette tax collection in 2012, it more than doubled to P70.4 billion in 2013. In 2014, it reached P75.5 billion and in 2015, P100 billion.

However, in 2016, collections from cigarettes dropped to P94.5 billion—the first time collections went down despite higher excise tax rates. — RSJ, GMA News