Gov't to tax alcohol more to afford universal healthcare

The House of Representatives is expected this week to vote on House Bill 8618, which seeks to raise the excise tax on alcohol products, after the measure was sponsored on the floor by Committee on Ways and Means Chairperson Rep. Estrellita Suansing (1st District, Nueva Ecija).

“For a simpler and more efficient tax structure; better health for our people; and wider indigent health coverage, I beseech your support in passing this measure,” said Suansing in her sponsorship speech last week.

Suansing said that during their recent deliberation on the universal health care bill in the bicameral conference committee, many questions revolved around the extent of coverage the government can provide given its limited funds.

“How do we pay for the P103 billion health premiums of 65.2 million indigent Filipinos? How do we cover the total requirement of P118 billion this 2019? Levying on the causes of our countrymen’s illness is not just judicious but certainly sensible,” said Suansing.

As one of the principal authors of the Universal Health Care Bill and as Chairperson of the Committee on Ways and Means, Suansing said it is her responsibility to ensure that both proposals are enacted in tandem.

“I hope that Your Honors can join me in fulfilling the noble intent of HB 8618, as an initial contribution to our indigents’ health insurance premiums. Alcohol products are generally inelastic, thus, increasing their tax rates could be a potent funding source for health care,” she said.

The bill aims to reduce alcohol drinking, which according to health experts is the seventh leading cause of disability and death. “The latest global research asserts that the safe level of alcohol drinking is zero, thereby debunking that age old saying that drinking in moderation can aid in one’s well-being. It apparently does not,” said Suansing.

As the proponent of tax on sugar sweetened beverages and as an advocate of healthy living, she personally wants alcohol prices to be prohibitive, to discourage people, if not to stop them from indulging, particularly the poor who do not have the means to pay doctors and buy medicines when they become ill.

Recognizing that alcohol drinking is part of normal revelry and that a whole labor force may be affected, Suansing assured that excise tax rates will only be raised minimally under the bill.
Moreover, she stressed that since the last tax hike on alcohol products was in 2012, through Republic Act 10351, it is assured that the new rates are fair and reasonable.

The measure provides that the ad valorem rate for distilled spirits will go up by 2% and its specific tax by P6.60 in 2019. For beer, the tax per liter will increase by P2.60 in the same year.

The bill also simplified the excise tax structure through the following: 1) it imposes 15% ad valorem and a single specific tax of P650 per liter on wines ; 2) it reduced the category in still wines from three to two; 3) it removed the distinction between handcrafted beer and those manufactured in factories; and 4) it indexed the tax rates to 7% to take inflation into serious consideration.

“It is quite ironic to say the least, that one of the means or solutions in preventing or curing the afflictions of alcohol consumption can also be found in the revenues of the causes of such diseases,” said Suansing.

House Bill 8618 substituted House Bill 8286 filed by Rep. Horacio Suansing, Jr. (2nd District, Sultan Kudarat), HB 8334 by Rep. John Marvin “Yul Servo” Nieto (3rd District, Manila), and HB 4839 by Deputy Speaker Sharon Garin. Former President and now Speaker Gloria Macapagal-Arroyo, Reps. Estrellita Suansing (1st District, Nueva Ecija), and AKO BICOL Party-list Reps. Rodel Batocabe and Christopher Co are also authors of the bill.

SOURCE: Rowena B. Bundang (2018). House to act on bill raising excise tax on alcohol products. PRESS RELEASES. 25 November 2018 03:49:47 PM.