Duterte signs hiked sin tax law

January 23, 2020
Rodrigo Roa Duterte
Rodrigo Roa Duterte

PRESIDENT Rodrigo Duterte has signed a law increasing excise taxes on alcohol, heated tobacco and vapor products as the government aims to raise additional revenues to fund the Universal Health Care program.

Executive Secretary Salvador Medialdea and Duterte’s spokesperson Salvador Panelo, as well as Finance Secretary Carlos Dominguez, have confirmed the chief executive’s action.

“I understand that the President has signed the bill into law,” Dominguez said.

The Senate and the House of Representatives ratified the bicameral conference committee report on the measure in December.

Certified as urgent by the President, the measure also includes a provision making the medicines for heart disease, diabetes, and cholesterol free of value-added tax (VAT) starting January 2020.

Medicines for mental health, cancer, tuberculosis, and kidney diseases will also be VAT-free starting January 2023.

The legislation seeks to reduce consumption of alcohol and tobacco products while generating revenue for the government to fund the UHC law.

Over a five-year period from 2020 to 2024, the DOF estimates revenues totaling P137.2 billion.

In July last year, Duterte signed a law increasing the excise tax on tobacco products.

Republic Act 11346 imposes an increase of P45 to P60 per pack in excise tax beginning next year to 2023 and then a 5% yearly hike effective January 1, 2024.