Manila Standard Today - Palace hails passage of sin tax bill

22 November 2012

By Sara Susanne D. Fabunan with Anna Leah Estrada, Macon Ramos-Araneta and Jonathan Fernandez | The Manila Standard Today

THE Palace on Wednesday welcomed the passage of the sin tax bill but remained non-committal on the fate of the reproductive health bill.

In a press briefing, presidential spokesman Edwin Lacierda said the Palace had not yet discussed the hotly contested bill with House leaders.

On Tuesday, Aurora Rep. Juan Edgardo Angara said the passage of the RH bill depended on President Benigno Aquino III.

“Definitely, the President’s certification that this is in an urgent bill.. that changes the equation,” Angara told the reporters in a forum.

He said the measure will remain in limbo without strong support from Mr. Aquino.

A substitute RH bill written by Albay Rep. Edcel Lagman to appease the Catholic Church has been pending on second reading.

Lacierda focused his remarks on the sin tax bill, which he said would help the administration meet its universal health care goals.

Finance Secretary Cesar Purisima said Wednesday the passage of the bill would meet the administration’s objective to realize P40 billion in incremental revenues from higher taxes on cigarttes and alcoholic beverages.

Purisima described the new taxes as “moderate” and said they would protect the young and the poor from the ill effects of smoking and excessive drinking by making these products more expensive.

“While we would have wanted higher tobacco tax increases to maximize our health gains, we understand that we work within the rigors of the legislative process to achieve our reforms,” Purisima said.

Health Secretary Enrique Ona described the passage of the bill as a victory in their campaign to protect people, especially the young and the poor from the ill effects of smoking and excessive drinking. He added that the extra funds would go the Philippine Health Insurance Corp. to expand its coverage for the poor.

Tobacco farmers were unhappy with the new sin taxes, but said the bill passed was a significant improvement over other versions in Congress.

The PhilTobacco Growers Association thanked Senate President Juan Ponce Enrile and Senators Ferdinand Marcos Jr. and Ralph Recto for fighting for the interests of farmers in hammering out the final version of the bill. They also credited the senators for specifying a more equitable 60-40 sharing of the tax burden between the tobacco and alcohol industries.

The health group Framework Convention on Tobacco Control Alliance, however, expressed disappointment over the sin tax bill passed in the Senate, saying it failed “to maximize the opportunity to save lives.”

The bill approved by the Senate on third and final reading proposes a three-tier tax rate for cigarettes, a unitary tax rate of P26 for machine-packed cigarettes, which would be implemented on the fifth year, or in 2017.

The original proposal put forward by Senator Franklin Drilon provided for a two-tier tax scheme and a higher unitary tax rate of P32, which would be implemented earlier, in 2016.

The final version of the Senate bill retained the target of collecting revenues of P40 billion in the first year, with cigarettes accounting for P24 billion of the tax collections, and alcohol products, P16 billion. This would be followed by a three-year transition period, with taxes increasing by P1 to P3 per pack, until the unitary rate of P26 is reached on the fifth year.

An anti-tax group on Wednesday vowed to make the senators who voted for the sin taxes suffer in next year’s elections.

“We will make these senators pay heavily in next year’s senatorial elections,” said Gie Relova of the People’s Coalition Against Regressive Taxation.

The group staged an indignation rally at the Senate on Wednesday to condemn the bill’s passage.

Relova said Filipino workers would bear the burden of the higher taxes while tobacco and alcohol companies continued to reap trillions in profit.