Manila Standard Today - Marcos to block killer tax on tobacco

6 December 2012

By Manila Standard Today

Senator Ferdinand Marcos Jr. has vowed to block moves to increase the 60/40 tax burden sharing between cigarettes and alcohol to 80/20.

In a chance interview before the start of the plenary session, he said finer points of the sin tax measure needed to be resolved.

“We agreed with the administration that the total collection of incremental revenue will be P40 billion, the unitary tax on tobacco will be after 5 years (2018), and third, which is the most important is the 60/40 sharing, 60 percent for tobacco and 40 percent for alcohol,” said Marcos.

He admitted that some members of the bicameral conference committee wanted the sharing further adjusted.

“We really can’t understand why always put the burden on tobacco,” Marcos said. “If you can remember, the P31.3- billion sin tax version approved by the House, they said they will make amendment to reach P35 billion, but if you will look at what they plan to do, all the added burden will be on tobacco. So, we have always been asking why on tobacco?”

He underscored his position that increasing the excise tax on tobacco would destroy the tobacco industry.

Marcos said they worked hard on the sin tax reform act in the Senate to look for a formula to include the 60/40 sharing among other ratios.

“So we will see what will happen during tomorrow’s continuation of the discussion,” he said, noting that several Senators whom he refused to name wanted a higher figure. “It appears to be their proposal.”

Marcos, who comes from the tobacco-producing region of Ilocos, warned that an exorbitant increase in tobacco taxes would displace 3 million tobacco farmers and their families.

He disclosed that the votes of the senate contingent on the motion to a 4%-increase every year was 3-3 with Senators Panfilo Lacson, Serge Osmena and Franklin Drilon in favor.

Marcos said Senators Ralph Recto and Senate Minority Floor Leader Alan Peter Cayetano supported his objection to the motion.

But Drilon said denied that 60/40 tax burden has been said, saying it was merely a guide.

“We have agreed on the disagreeing provision, but we have set aside, for further discussion, the rates and earmarking,” he said.

“The various disagreeing provisions were discussed and agreed upon, but what remained to be discussed would be the rates and the earmarking on all. All the non-rate provisions on tobacco and alcohol have been agreed upon.”

Drilon said no 60/40 provision has been set in the Senate.

“That is the guide, that is the computation we arrived at: P23.5 billion for the cigarettes and the remaining P16 billion on the alcohol,” he said. “We have not discussed the burden sharing because that is precisely a matter that we have deferred for further discussion. We have no more time to discuss it.”