Press Release
August 10, 2010

Pia tells Congress: Don't be afraid to open debates on hiking cigarette taxes

Senator Pia S. Cayetano today said lawmakers should not be afraid to open the debates in Congress on the prospects of increasing excise taxes on cigarettes and tobacco products.

This after the Department of Health (DOH) signified its support to hike cigarette taxes to help fund public health programs, including the expansion of the Philippine Health Insurance System (PhilHealth) to cover five million indigent Filipinos.

Achieving universal PhilHealth coverage is one of the flagship programs of the new administration of President Benigno S. Aquino III.

"Let me emphasize that the imposition of new taxes should never be undertaken in lieu of collection inefficiency. Having said that, Congress should not hesitate to open the debates on hiking excise taxes because we have a fresh opportunity under the Aquino administration to address our health concerns on the ill-effects of smoking. In addition, the revenues can also be used to support displaced tobacco farmers and cigarette factory workers," said Cayetano, Chairperson of Senate Committee on Health and Demography.

The lady senator made the statement in support of suggestions from DOH and the Framework Convention on Tobacco Control Alliance Philippines (FCAP) for the country to follow the "Obama Model" in the United States. The proposal seeks to raise excise taxes to up to P4.50 per cigarette stick, or P90 for every 20-stick pack, to discourage smoking which is an indulgence of over 17.3 million Filipinos aged 15 years and above.

"All the arguments for and against the proposal should be presented and weighed in an open public hearing in Congress involving all the sectors concerned."

She said the benefits of higher cigarette taxes include increasing government revenues in the short-term, and second, less government expenses for tobacco-related diseases, if higher excise taxes succeed in making more Filipinos quit the habit. "Revisiting the excise tax system on cigarettes also opens an opportunity for Congress to review government's compliance with safety nets under the law, which were meant to help tobacco farmers shift to alternative means of livelihood."

She said under Republic Act 8240, fifteen percent of the incremental revenue collected from excise taxes on tobacco products should be allocated and divided among tobacco-producing provinces. Meanwhile, Republic Act 9211 mandates the government to provide alternative livelihood programs for displaced tobacco farmers and cigarette factory workers as a result of tighter government restrictions on cigarette advertisements, sales and promotions.

"How is government's compliance with these laws? Have they really been able to support our local tobacco farmers? Such questions can be answered in a comprehensive public hearing."

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