Plans to Increase Sin Tax to Fund Universal Healthcare Law

Senator JV Ejercito expressed his worry about the funding of the Universal Healthcare bill and looks at a possible solution to increase the so-called ‘sin taxes’ especially on tobacco products to fund the bill.

During the Kapihan sa Senado media forum on Thursday, he said that the budget for the program’s first year of implementation is enough but might not be sufficient in the succeeding years as more Filipinos register under the program. The Universal Healthcare bill looks to provide health insurance coverage to all Filipinos whether they directly or indirectly contribute to the Philippine Health Insurance Corp. (PhilHealth).

“Maybe in the first year, it looks like the budget could cover it but I would think in the second or third year, it may be inadequate. That’s why I will still push for additional possible revenues, particularly this sin tax. Maybe we can raise it, particularly the tobacco tax,” said Ejercito.

He added, “I still feel that we have room to increase because we raised the sin tax in 2012. If we compare prices of tobacco products with the rest of Asia, ours is the lowest and the cheapest. As chairman of the committee on health, I would want to hit two birds with one stone so let’s do this as a revenue generating measure to raise (sin taxes).”

Fund Sources for the UHC

According to PhilHealth, 93% of Filipinos are already covered by health insurance. But Senator Ejercito still estimate that the program will need P200 billion for its first year of implementation.

The Senate approved the Universal Healthcare Bill on its third and final reading last Wednesday. Its counterpart measure, on the other hand, was passed in the House on September 6, 2017.

For the universal healthcare program, the funds collected from the Philippine Charity Sweepstakes Office (PCSO), and the Philippine Amusement and Gaming Corp. (PAGCor), the incremental sin tax collections from tobacco and alcohol products, and the sugar tax will be pooled.

Funds collected from different sources will be added to the regular annual appropriations for the Department of Health (DOH) and PhilHealth including the mandates and programs under Universal Healthcare. This is according to a statement by the Senate President Pro Tempore Ralph G. Recto, who is the principal author of the bill.

“The bill earmarks a raft of funding sources… It cannot be reduced. We are benchmarking the minimum funding requirements,” said Recto.

Measures that will increase sin taxes have been filed in Congress. Senator Manny Pacquiao has introduced Senate Bill No. 1599, which aims to increase the unitary cigarette tax to P60. Senator Ejercito, meanwhile, has authored Senate Bill No. 1605 that will excise tax to P90. Both bills remain pending at committee level.

After the passage of the Universal Healthcare Bill, Ejercito said that both chambers of Congress are planning to hold their bicameral conference committee discussions next week.

via BusinessWorld / Camille A. Aguinaldo