Sin tax law cuts smoking prevalence by 50%

The implementation of Republic Act No. 10351, or the law that restructured the excise tax on alcohol and tobacco products, has raised more government revenues and reduced the smoking prevalence among the youth by as much as 50 percent, the Budget Department said Monday.

Budget Secretary Florencio Abad said the government had released some P6.46 billion for tobacco farmers, after collecting more taxes from the tobacco industry.

“The additional revenues allowed the government to provide more for livelihood and health services.  Our drive for excise tax reform has always considered the people’s well being,” Abad said.

Abad said the government was expecting about P42.86 billion in incremental earnings this year.

He said that while the so-called  sin tax law provided more revenues for the government, it cut the population of smoking Filipinos from 38 percent to 25 percent.

“Smoking has also gone down for younger Filipinos. Smoking prevalence among the young people from ages 18 to 24 was nearly slashed by 50 percent,” he said.

Abad said about P30.49 billion of the sin taxes this year was allocated to the Health Department, bringing its budget to P90.5 billion, or almost three times the level when the Aquino administration started in 2010.

He said some P57.08 billion would be made available for health programs in 2015.

Abad said some P22.7 billion from the incremental revenues would help subsidize PhilHealth premiums for the poor and indigent.

“This will enable us to not just fully subsidize, but even to double the health premiums of 14.7 million indigents, with a budget of about P35.3 billion,” he said.

Abad said P3.85 billion would now fund policy and regulation standards, P2.26 billion would support hospital operations and about P1.68 billion would go to preventive health programs.

He said the government was committed to deploy about 80 percent of the sin taxes to public health services.

“That is why aside from the 14.7 million indigents, and doubling the premiums, and spending P35.3 billion, we’ve also implemented health facilities enhancement program, so even barangay health station, health units, district and provincial hospitals, are also being rehabilitated and improved,” he said.

He said of the total incremental revenues, local government units would receive 15 percent.