Sin taxes boost DOH funds

(The Philippine Star)


MANILA, Philippines – The continued increase in resources allocated for health care shows the successful implementation of the Sin Tax Law, a senior Finance official said.

Finance Undersecretary Jeremias Paul Jr. said budget allocation for the Department of Health (DOH) increased 63.4 percent this year and 57.4 percent in 2014, both over 2013 levels.

Setting aside more funds for health care has been a product of increasing taxes on alcohol and tobacco under the Sin Tax Law, which took effect in 2013, Paul said.

Paul said government allocation for health insurance premiums also climbed and resulted in a 185-percent increase in the number of registered indigent Philippine Health Insurance Corp (PhilHealth) members.

I think we are one of the finance ministries around the world who do not only think about increasing tobacco taxes for revenue purposes, but we also think about how much death will be averted, Paul said.

Citing the 2013 National Nutrition Survey, Paul said the adult smoking prevalence dropped to 25.4 percent in 2013 from 31 percent in 2008. The rate is expected to further slide following the implementation of the Sin Tax Law.

Six tax revenues amounted to P50.2 billion in 2014, breaching the governments P49.2-billion target for the period. Incremental revenues for health programs, meanwhile, reached P42.6 billion last year.

However, Paul said the introduction of cheaper cigarettes in the market and the tobacco companies action to absorb part of the taxes remain a challenge for the implementation of the Sin Tax Law.

He said keeping the prices of cigarettes affordable defeats the drive to reduce tobacco use and also raise more revenues from taxes levied on the commodity.

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