Senate Bill 3249

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  • Topic: Tobacco, Indirect tax, Tax
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  • Published : December 6, 2012
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FIFTEENTH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES Third Regular Session

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SENAJE \ii:!49 S.No.

Introduced by Senator Miriam Defensor Santiago

EXPLANATORY NOTE The Constitution provides: Article 2, Section 15. The State shall protect and promote the right to health of the people and instill health consciousness among them. Article 2, Section 13. The State recognizes the vital role of the youth in nation-building and shall promote and protect their physical, moral, spiritual, intellectual, and social well-being. It shall inculcate in the youth patriotism and nationalism, and encourage their involvement in public and civic affairs.

There is an urgent need for reform on excise tax on tobacco and alcohol products to achieve the following goals: (a) Deter young people from smoking and drinking alcohol, and protect them from the lifetime consequences of smoking and alcohol abuse; (b) Reduce the consumption of cigarettes and alcohol, thus decreasing the health and healthcare costs of tobacco and alcohol use; and (c) Finance a universal health care program to improve accessibility to quality health care. This version of the sin tax bill contains the following reforms: (a) Removal of the price classification freeze on cigarettes. The current classification of cigarettes is still based from a net retail price survey done in 1996. It's been 16 years and prices of cigarettes have definitely increased through the years. (b) Unitary tax for all cigarette and alcohol products. The effect of cigarettes and alcohol is the same regardless of the price.

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(c) Indexation to the nominal gross domestic product (GDP) growth rate as published by the National Statistical Coordination Board (NSCB). Indexation to GDP will keep tax

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rates real and will ensure that tobacco and alcohol products will not become more affordable as income increases over time. (d) Significant increase in tax rates. This will serve as a deterrent to the young and the poor from tobacco use and alcohol drinking. (e) Earmarking of incremental revenues to universal health care system to be allocated to the following: (I) Expansion ofNHIP enrollment and benefit delivery. This provides the poor some

protection from financial impact of healthcare by improvement in the delivery ratio of the NHIP. (2) Upgrading of health-care facilities, thus improving access to quality health care services. (3) Public health programs to include research and development to achieve millennium development goals, including addressing non-communicable

diseases/lifestyle diseases. (4) Periodic review (every 5 years) to modify tax rates to achieve the health and revenue objectives of the government as well as to comply with binding commitments to the World Health Organization (WHO) Framework Convention on TobaccoControl. (5) Earmarking of funds (15%) from excise tax on tobacco products under Republic Act No. 8240, to be allocated to programs to help tobacco farmers (including financing of credit guarantee and crop insurance programs) shift to alternative crops other than tobacco and other alternative livelihood; and adjustment measures program for prevention of job losses and assistance to displaced workers. This bill is supported by the Philippine College of Physicians, the Philippine College of Chest Physicians, the Philippine Cancer Society, Inc., the Framework Convention on Tobacco Control Alliance, Philippines, and the Philippine Society of Gastroenterology.

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FIFTEENTH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES Third Regular Session

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SEN~T249 S.No. _ _ __

Introduced by Senator Miriam Defensor Santiago

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AN ACT RESTRUCTURING THE EXCISE TAX ON ALCOHOL AND TOBACCO PRODUCTS Be it enacted by the Senate and the House of Representatives of the Congress of the Philippines in session assembled:

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SECTION 1. Section 141 of the National Internal Revenue Code of 1997, as amended by Republic Act No. 9334, is...
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