A proposal to delay tax hikes on tobacco products could result in a P27-billion funding gap for the Universal Health Care (UHC) Law over five years, according to the Anakalusugan party-list.
The group criticized House Bill 11279, which seeks to postpone the scheduled 4% tobacco tax increase for 2026 in favor of a 6% hike in 2027 and subsequent biennial increases. The proposed moratorium also allows the President, upon the Finance Secretary’s recommendation, to implement a 5% tax increase in years without scheduled hikes if the national deficit exceeds 2% of the previous year’s gross domestic product.
“Health Sabotage Bill”
Anakalusugan party-list Representative Ray Reyes labeled the moratorium a “Health Sabotage Bill,” warning it could jeopardize critical UHC programs, such as building health facilities, hiring medical personnel, and expanding public health services.
“This bill threatens over P27 billion in government revenues essential for Universal Health Care. Its passage would undermine public health and harm the economy, reversing our progress toward a healthier, more resilient nation,” the group said.
The party-list also urged the public to oppose the measure, emphasizing that projected health expenses are expected to rise by 18% by 2025.
Impact on Smoking and Public Health
Anakalusugan highlighted data from the Department of Health showing that the current tax rates have not deterred an increase in smoking. The group warned that freezing sin taxes could lead to 400,000 additional smokers by 2030, exacerbating health care costs.
“Removing or delaying sin taxes will increase smoking across all demographics. This means lost revenues for the government and higher healthcare costs,” the party-list added.
It also cited the broader economic toll of smoking, which costs the country P414 billion annually in lost productivity and medical expenses.
Rising Illicit Trade and Vaping Concerns
House Ways and Means Committee Chair Joey Salceda echoed concerns about the tax policy’s effectiveness, pointing to a rise in illicit cigarette trade and vaping.
Salceda said the government lost P129 billion in tax revenues over the past three years due to untaxed cigarettes, highlighting a 5% increase in smoking prevalence from 2021 to 2023, as per the National Nutrition Survey.
“There’s been a shift from licit to illicit cigarettes and increased vaping, which hasn’t necessarily reduced smoking. We’ll await the Finance Department’s position before proceeding further,” Salceda stated.
With health care funding and public health on the line, stakeholders continue to debate the merits of the proposed moratorium.