Bill raising excise tax on tobacco products approved in Senate

Updated: Jun 10, 2019


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(UPDATE) A day after it was approved by the Senate, both the House of Representatives and the Senate ratified the bill that seeks to raise the excise tax on tobacco products. As the 17th Congress prepared to adjourn sine die on June 4, 2019, the bill was being prepared for endorsement to President Rodrigo Duterte for his approval.


Senators, voting 20-0-0 on June 3, 2019, approved a measure that seeks to raise the excise tax on tobacco products.


Senate Bill 2233 is part of the Duterte administration’s Comprehensive Tax Reform Program. It was certified as urgent by President Rodrigo Duterte on May 28, 2019, which would allow the Senate to expedite its approval.


The higher excise tax on tobacco products, considered “sin” products, will finance the Universal Health Care (UHC) program, which aims to provide Filipinos with equitable access to quality and affordable healthcare and protection against financial risk.


The Senate version was approved on third and final reading four days before the 17th Congress is set to end. The House passed a similar bill in December 2018.



Under the measure, the excise tax on tobacco products will increase to P45 per pack in 2020, P50 per pack in 2021, P55 per pack in 2022, P60 per pack in 2023, and by 5% in 2024 and yearly thereafter.


The measure also seeks to tax heated tobacco products (HTPs) by P10 per pack of 20 in 2021 and by 5% thereafter.


Vapor products will also be taxed at the following rates: 0.00-10ml = P10; 10.01-20 ml = P20; 20.01-30 ml = P30; 30.01-40 ml = P40; 40.01-50 ml = P50; >50 ml = P50 plus P10 pesos for every additional 10 ml.


“This victory is for the health of the entire Filipino nation and for the massive implementation of the Universal Health Care,” the Department of Finance said shortly after the measure was approved.


Earlier, Finance Undersecretary Karl Kendrick Chua said House Speaker Gloria Macapagal-Arroyo has committed that the House would adopt the Senate version so that there would be no more need for bicameral conference committee negotiations before the bill is endorsed to President Duterte for signature.


According to Chua, enacting this measure into law would expand PhilHealth coverage for primary care to cover 120 drugs.


Barangay health care facilities will also be expanded and will be better equipped to render primary health care, he said.


Finance Secretary Carlos Dominguez III warned earlier that the UHC program would need funding of P257 billion in 2020. Of this amount, P195 billion will come from the Philippine Amusement and Gaming Corp. and Philippine Charity Sweepstakes Office, leaving a shortfall of P62 billion unless the sin tax rates are adjusted.


The funding requirement will increase by P11 billion to P12 billion per year, amounting to a five-year total of around P1.44 trillion by 2024. If sin tax rates are not adjusted, Dominguez said there will be a funding gap of P426 billion by 2024. (Ventures Cebu)

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