By Maricel Cruz with Macon Ramos-Araneta and Christine F. Herrera | Manila Standard Today
The Senate and the House of Representatives on Tuesday ratified the Sin Tax Reform Act, which aims to raise P33.96 billion from new excise taxes, with the tobacco and alcohol industries sharing the burden 69-31 percent in the first year.
In the House, critics of the final version of the bill slammed it for being anti-poor.
“If you look at the sin tax bill as approved by the bicameral committee, the tax increase for tobacco products will be at least 1,000 percent by 2017. This is ridiculous. I have never seen this kind of tax increase in my entire career as a lawmaker,” said Zambales Rep. Milagros Magsaysay said.
“Let’s all remember that an excise tax is a pass-on tax. In other words, the 1,000 percent tax increase will be shouldered by the consumers, most of whom belong to the low-income class. Imposing a 1,000 percent tax increase is clearly against the Constitution. It is regressive and anti-poor,” she said.
Magsaysay also warned that excessive tax increases especially on tobacco products will cause massive dislocation in the tobacco industry and will result in the proliferation of smuggled cigarettes.
“There are 2.9 million Filipinos dependent on the tobacco industry. If we increase the taxes excessively, they will lose their livelihood. Without any income, our tobacco farmers and their families will starve to death. Are we really willing to do this?” Magsaysay asked.
The opposition lawmaker also criticized the removal of provisions in the Senate version of the bill that aimed at helping displaced tobacco workers and farmers.
Bayan Muna Rep. Neri Colmenares o denounced the sin tax as “confiscatory, regressive and anti-Filipino” because it imposes an increase in taxes that is much higher than local farmers’ production cost and profits combined.
“The sin tax bill is anti-Filipino and a form of taxation that favors imports over local brands and jeopardizes the job security of small farmers and workers in the tobacco and alcohol industries,” Colmenares said.
He added that the bill was confiscatory in nature because small tobacco farmers would be unable to bear the heavier tax burden.
“How [does] the government expect small players to survive in a regime where they have to shell out tax payments that are higher than their production costs and profits combined,” he said. “This is definitely confiscatory and I fail to see how the government cannot understand this,” he said.
The vote was close in the Senate, which ratified the bicameral conference committee report 10-9.
Those who voted in favor were Senators Edgardo Angara, Pia Cayetano, Franklin Drilon, Miriam Defensor-Santiago, Panfilo Lacson, Lito Lapid, Serge Osmena III, Francis Pangilinan, Aqulino Pimentel III and Antonio Trillanes IV.
Those opposed were Senate President Juan Ponce Enrile, Senate Majority Leader Vicente Sotto III, Senate President Pro Tempore Jinggoy Estrada, and Senators Ralph Recto, Ferdinand Marcos Jr., Francis Escudero, Joker Arroyo and Ramon Revilla Jr.
Senate Minority Leader Alan Peter Cayetano and Senators Loren Legarda, Manny Villar and Teofisto Guingona III were not present.