The Senate Ways and Means Committee, under the chairmanship of Senator Pia S. Cayetano, has presented to the plenary Senate Bill No. 1074 seeking to increase excise taxes on sin products, with the objective of augmenting funds for universal health care and protecting citizens, particularly the youth, from the harmful effects of drinking and electronic cigarettes.
Delivering her sponsorship speech on Wednesday (September 25), Cayetano stressed the need to impose “significantly higher” tax rates on alcohol, e-cigarettes, and heated tobacco products (HTPs) in order to safeguard Filipinos’ health and wellbeing.
Cayetano’s committee is proposing the following excise tax rates for the different types of alcohol products:
Distilled spirits: an ad valorem tax of 20% and a specific tax of Php 90 per proof liter on Year 1, to be increased by Php10 every year until Year 4, and by 10% every year thereafter.
For fermented liquor and alcopops: a specific tax rate of Php 45 per liter on Year 1, to be increased by Php10 every year until Year 4, and by 10% every year thereafter.
For wine products: a specific tax of Php 600 per liter for sparkling wines and Php 43 per liter for still and carbonated wines, to be increased by 10% every year thereafter.
The Ways and Means Chair explained that the specific tax rate on distilled spirits was raised to Php 90 because they have the highest alcohol content among the different types of alcohol products, and as such are the most harmful to people’s health.
Furthermore, the Committee proposed to tax e-cigarettes, HTPs, and vape products the same rate as conventional tobacco products.
The Committee proposed to tax HTPs at P45 per pack of 20 in 2020, increasing such rate to P5 per pack per year like regular cigarettes. For vape products, the recommendation is to tax those containing freebase nicotine at P45 per 10ml or a fraction thereof; and those containing nicotine salts at P45 per 1ml or a fraction thereof.
In pushing for higher taxes on alcohol, Cayetano said there is “glaring evidence” that the excessive use of such products endangers people’s health.
“Alcoholism is associated with at least 39 main diseases, including liver cirrhosis, cancer, pancreatic disease, hypertensive disease, tuberculosis, diabetes, and even behavioral and psychotic disorders,” she said, citing a report by the Global Burden of Disease Study.
Also, World Health Organization data revealed that in 2016, 4,431 per 100,000 population of Filipinos died from liver cirrhosis; while 16,418 died from hypertensive diseases; and 8,526 from tuberculosis.
“All of which were due to the excessive use of alcohol,” Cayetano pointed out.
“The impact of our problem on alcoholism is not felt by the drinker alone,” she further stressed, adding that excessive drinking is also a common cause of road crashes and a contributor to family violence.
The senator lamented that, with these products becoming more accessible to vulnerable sectors, there is a risk that these numbers and incidents would continue to grow. Hence, the need to increase their prices and make them less affordable.
Cayetano said the measure seeks to address the high drinking prevalence among Filipinos, who on average are already consuming 11 liters of hard alcoholic beverages per year. This is higher than the global and ASEAN averages of below 10 liters.
“Global champion na po tayo, sa inuman. But that is not something we should be proud of,” the senator said, adding that the prices of alcohol in the country should not be so cheap as to allow Filipinos, especially the young people, to easily have access to them.
E-cigs and HTPs
“For the sake of our children, we must regulate and tax e-cigarettes at parity with regular tobacco products. Other countries are already doing this. We should at least keep pace. Vaping is not cool when it leads our kids to the path of new addictions,” Cayetano said about e-cigarette products.
The senator questioned the position of manufacturers and distributors who claimed that e-cigarettes are a viable and less harmful alternative to conventional smoking.
“The industry claims that it is a safer product but medical experts have pointed out that safer does not mean safe or risk-free. We have already seen and heard an avalanche of news of people who died because of lung failure in the United States – people who were consistent users of these vape products,” she said.
“Thus, Mr. President, this representation asks that we err on the side of caution,” she added during her speech.
Apart from the sin tax bill, Cayetano said she plans to file more measures seeking to address the country’s problems associated with alcoholism and the dangers of vaping among the youth.
“This Committee is tasked with the taxation of these products. But this, in no way, limits DOH [Department of Health] and Congress to undertake steps to protect the health of the people,” she said.
“We remain cognizant that taxation is just one tool and that a comprehensive strategy is necessary. We urge DOH [Department of Health] to work with our medical community on this through aggressive interventions and policies.” #