Business Mirror - Senator pushes for review on status of implementation of ‘sin’-tax law

In The News
13 January 2014

By Mia M. Gonzalez | Business Mirror

businessMirrorA main proponent of the “sin”-tax reform law is seeking a congressional review on the status of the implementation of the measure to ensure government compliance with its twin goals of revenue enhancement and increased funds for public health care.

Sen. Pia Cayetano has filed Senate Resolution 440 directing the Oversight Committee created under Republic Act (RA) 10351, or the sin-tax reform law, to conduct an inquiry, in aid of legislation, on the status of its implementation.

“One year after we struggled and succeeded in the passage of the Sin-Tax Reform Act, have our people started to benefit from higher sin-tax collections as this landmark law had envisioned?” Cayetano said.

She said there is an “urgency for Congress to undertake this review to ensure that the twin goals of the law are being observed and complied with, namely, to enhance the government’s tax collections from alcohol and tobacco products, and to allocate substantial funds from sin-tax revenues for public health programs.”

“Until now, there are no rules and regulations governing the earmarking of funds from incremental revenues. And as such, these funds have not been released to the concerned agencies. These are clear delays and violations of the law,” Cayetano said.

She said during Senate deliberations on the 2014 budget, health officials said they were unaware of releases for universal health care under the National Health Insurance Program (NHIP), medical assistance, or health facilities-enhancement program from the incremental revenues of RA 10351on top of the Department of Health’s regular budget.

Cayetano said officials of the Department of Budget and Management, Bureau of Internal Revenue (BIR), and the Department of Finance “owe the people and the Congress an explanation where the billions in sin-tax collections are going.”

Cayetano said initial data from the BIR itself indicate that for the first 11 months of 2013 alone, the agency was already able to exceed its whole-year sin-tax revenue target for 2013 under RA 10351.

From January to November, sin- tax collections reached P91.6 billion, more than the BIR’s full-year collection target of P85.8 billion for sin taxes.

Cayetano said while the figures are “encouraging,” it would be better to see the complete picture in terms of implementation by determining how much of these revenues had been earmarked and allocated for universal health care, government health programs, and to promote economically viable alternatives for tobacco farmers and workers.

She said in Section 8 (B) of RA 10351, 15 percent of incremental revenues from excise taxes on tobacco products shall be exclusively for programs to promote economically viable alternatives for tobacco farmers and workers in tobacco-producing provinces.

The remaining incremental revenues should be allocated to universal health care under the NHIP, medical assistance, and the health-enhancement facilities program as mandated by Section 8 (C) of the law.

In filing Senate Resolution 440, Cayetano said there is also a “pressing need to look into how the law is being implemented, whether it is effective in curbing the prevalence of smoking among Filipinos, especially the youth.”

Meanwhile, Sen. Ferdinand Marcos Jr. reminded the government that tobacco farmers were identified as among the beneficiaries of revenues from the sin taxes under RA 10351.

“It’s very clear in the law that tobacco farmers should receive a certain percentage from the revenues out of the excise-tax collection from tobacco products. If the law is very clear on that, the government should make sure that the farmers will get their entitlement,” Marcos said.

He said there are 53,892 farmers dependent on the tobacco industry.