Duterte approves higher taxes on alcohol, tobacco products

President Rodrigo Duterte supports the proposal to impose additional excise taxes on tobacco and alcohol products, Malacañang said Tuesday.

Duterte approved the proposal of the Finance and Health departments during the monthly Cabinet meeting on Monday.

“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,” presidential spokesperson Salvador Panelo said.

The House of Representatives approved on third and final reading last month two bills seeking to raise taxes on alcohol and tobacco products.

Under House Bill 8618, distilled spirits such as brandy, whisky and alcopops will be levied a 22-percent ad valorem tax rate per proof on the net retail price, plus a specific tax of P30 per liter beginning 2019.

House Bill 8677 seeks to increase the excise tax on cigarettes to P37.50 per pack in July 2019, and will be raised by P2.50 a year after that.

Senator Manny Pacquiao proposed to raise the excise tax on cigarettes to P60 per pack, which is currently at P35, while Senator JV Ejercito sought to raise the excise tax on cigarettes to P90 per pack.

Panelo, in a briefing with reporters, said the Finance and Health departments recommended to the President to certify Pacquiao's bill as urgent.

"Under the proposal, the tax on tobacco would be raised to P60 per pack while on the part of alcohol it will be P40 per liter. So the recommendation is that bill should be passed and signed into law," he said. "[This will be implemented] on a staggered basis."

Panelo said Duterte also received a briefing from the Cabinet on the implications of the reenacted budget for the first quarter of 2019.

The Palace official cited the delay in implementing the salary increase of government employees, including teachers, policemen and soldiers, as well as infrastructure programs, and delivery of basic social services.

The plebiscite on the Bangsamoro Organic Law on January 21 will not be affected as the required appropriations were was already included in the 2018 budget.

The spending bill was approved by the House on second reading on October 3.  However, it was approved on third and final reading only on November 20 and was transmitted to the Senate a week after for deliberations.

Talks of project insertions and questions about huge lump sum items also surfaced that furthered hindered its passage before the end of 2018.

Duterte has since signed a resolution extending the validity of the 2018 appropriations for maintenance and other operating expenses and capital outlays to December 31, 2019.

Panelo said the Cabinet reiterated the  importance of creating a disaster department to address emerging challenges in disaster resiliency. The proposal remains pending in Congress.

The Cabinet was also briefed on the damage caused by Tropical Depression Usman as well as the assistance provided by concerned agencies.

Panelo said the Cabinet also discussed the possibility of tapping road funds to finance hospital needs and the clean-up of the Manila Bay.

He echoed the President’s pronouncement last week that a portion of the fund could also be used to benefit those affected by Usman, especially in the Bicol Region.

Duterte is pushing for the abolition of the Road Board, which is mandated to ensure prudent and efficient use of the road user’s tax, arguing the funds had become the “milking cow” of corrupt politicians. —VDS/BM, GMA News