Business Mirror – ‘Sin’ tax law up for review, says Marcos

By Mia M. Gonzalez | Business Mirror

Lower excise-tax collections and sale of tobacco products in the country since the enactment of the ‘sin’ tax law pointed to flaws in the measure, a senator said on Thursday.

Sen. Ferdinand Marcos Jr. said at the Kapihan sa Senado that he is planning to present a full review of the effectiveness of the sin-tax law a year after its enactment, or in January next year.

“They have not collected even a single centavo because precisely the things that I brought up during the debates on the floor, that is exactly what has happened. Smuggling has become rampant,” Marcos said.

The senator made the statement a day after the Lucio Tan Group of Companies (LTG) said the government may lose as much as P8 billion in revenues from excise taxes this year because of increased cigarette smuggling, following the implementation of the sin-tax law in January.

“The collections both as a quantitative solution and also as a qualitative argument clearly has been shown to be flawed….We are certainly going to be taking this up one year after the sin taxes are enacted, I am going to stand up and tell you exactly what happened with the sin taxes, whether it has been effective or not,” he said.

Marcos said he had warned of even lower excise-tax collections due to increased smuggling of cigarettes when the sin-tax bill was being deliberated last year.

“In the first quarter of 2013, they had no collections because exactly of the things we have warned them about, but they did not listen,” he said.

The government’s excise-tax collections on sin products fell by P2.25 billion in March, but the Bureau of Internal Revenue had attributed this to the “front-loading” practice of tobacco companies or advancing their shipments to avoid payment of higher excise taxes.

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