Duterte to sign soon bill raising tobacco excise tax - DOF
President Rodrigo Duterte is expected to sign soon the enrolled bill, which seeks to further raise the tobacco excise tax, an official of the Department of Finance said on Wednesday.
“I was told it will be signed this week because that is a priority measure, certified urgent by the President in the previous Congress and mentioned by the President in the SONA (State of the Nation Address),” DOF Undersecretary Karl Kendrick Chua said in an economic briefing in Malacañang.
Chua said the tobacco excise tax bill was transmitted last June 27 to Malacañang.
“That means it will lapse into law (on) July 27. And my understanding is it is ready for signature by the President,” he added.
The increase in tobacco excise tax is part of the administration’s tax reform package 2-plus, which includes heated tobacco products and e-cigarettes.
The increase of tax rates of cigarettes per pack will be from the current P35 to P45 next year, up to P60 in 2023.
Chua said 50 percent of the taxes to be collected will be used to fund the Universal Health Care while the remaining 50 percent is for other projects, such as infrastructure and education.
“In the coming five years, we have a big gap to fill out, around 400 billion (pesos) and we thanked the previous Congress for passing the one for tobacco. The tobacco excise tax consists of increasing the (price of) regular cigarettes, from 35 peso per pack, this year to 45 pesos per pack next year until it reaches 60 pesos,” he explained.
“Congress also included tax on heated tobacco products, the burned one, cigarette. There is a new heated technology but they made it 10 pesos only. And just like what President Duterte said, we need to increase that, that’s why our proposal is they will be equal to regular cigarettes at 45 pesos per pack,” he added.
If signed, Chua said the government expects the poor and the youth to cut down their cigarette consumption while the rich people can continue their vices.
“And that’s the target market of our reform,” he said.
The Finance official said the government is also pushing to increase the taxes for alcoholic beverages. Ella Dionisio/DMS